 the agricultural refinance corporation bill: 1962(as indoduciid in lok sabra on sth december, 1962)  arrangement of clauses ciiapteri claubu1 short title, extent and commeneement 2 definitions  establishment and capital 01' tile agricultural rumaifcil codoaa- tlob3 establishment and inoorporaticm of agricultural reftnance corporation 4 omeas and' agencies ~ share capital and shareholders 6 guarantee by central government 7 shares of corporation to be deemed ~ be mcurim ,for certain purposes 8 register of shareholders  chapteltm9 management 10 board of directors 11 term of oftlce and retirement of diredon add 'parma at fee; to' them; 12 disqualifications 13 vacation and resignation of oftiee by dfreetoi'l 14 mafufgiitg ditector  0) 2277 (b) ls-l claus 15 casual vacancies in the oftlee of ma"ipfti direet01' 16 meetings of board 17 committees of corporation 18 member of board or committee then!of not to vote in eertata cases  chapter iv funds and busini'ss or tid corporaftoiii'19 central government to make a loan of five croree of nape8-20 borrowings by corporation 21 loans in foreign currency 22 business which the corporation may transact 23 limit of accommodation 24 power to impose conditions for aecommodatiml 25 power to call for repayment before agreed period 26 deposit accounts and investments  chapi'er v accounts um at11m'27 preparation of balance-sheet, etc, of corporation 28 disposal of profits 29 special deposit 30 audit 31 general meetings 32 returns  chapter vi miscellaneous33 power of central government to give c:tirection • 34 staff of corporation 35 corporation to have access to recorda " 36 act'18af 1891 to apply to books of corporatiod 37 liquidation of corporation 38 indemnity of directors 39 defects in appointment not to invalidate aets, etc 40 protection of action taken wlder the ad clav_ u declaration of fidelity and secrecy "2· provisions relating to income-tax and luper-tax 43 delegation of powers « penalties 45 offences by companies 46 powers of board to make regulations 47 amendment of certain enactments the first schedule-drclaration of p!dblity and hcucy the second schedule-ambndmbnt of cilrtain ilnactmbiii'ts - -  '! the agricultural refinance corporation < bill,i962 (as iimioducm in lolt sabha)a bill to provide few the establishmmt of a corporation for granting medium '  and long term c1'edit by way of refinance or otherwise, for 'the ~ -  d~t,elopinent of agriculture and for other matters connected there-', with or 'incidental thereto be it enacted by parliament in the thirteenth year of the republic oilildie as follows:-, chapter i  preliminary" ~ ~  5  1  (1) this act may be called the agricultural refinance corpora- 8bon title, tion act 1962 , (2) it extends to the whole of india    " "  (3) it shall come into force on such date as the central government may, by notification in the official gazette, appoint   ::;'1 'r (10 z in this act, unless the context otherwise requires,-(a) "agriculture" includes animal husbandry, dairy farming, :: ; ~ture; poultry flimnirig and stock' breeding;   ",  ""  ' '  (b) "board" means the board of directors of the corporation; (c) "central land mortgage bank" means the principal land iis " 1·tnm1gage: bank' in' a state' which is' registered, or deemed to be registered, under the co-operative societies act; 1912 or !tny other law for the time being in force in any state relating to co~l'a­tive societies and the primary object of which is the providid, of long term finance for agricultural development: provided that in addition to such principal land mortgage bank in a state or where there is no such bank in a state, the ~ state government may, with the previous approvtd of the reserve ~nk, declare anyone or more land mortgage banks registered or deemed to be registered as aforesaid and cajtylng on the business of providing long term finances for agricultunl development in that state to be a central land mortgage bank « 10 banks within the meaning of this definition; (d) "co-operative society" means a society registered', of deemed to be registered, under the co-operative societies act, 1912 or any other law for the time being in force in any state s of iir •• relating to co-operative societies; js (e) "corporation" means the agricultural refinance corporation established under this act; </) "eligible institution" mean~ (i) a central land mortgage bank or a state co-operative bank or a scheduled bank, being in each case a shareholder 20 of the corporation; and (ii) a co-operative society (other than a eentral led mortgage bank or a state co-operative bank) approved by the reserve bank in this behalf; (g) "life insurance corporation" means the life insurance ~s cerporation of india established under section 3 of the life insurance corporation act, 1956; (h) "prescribed" means prescribed by regulations made under this act; (i) "reserve bank" means the reserve bank of india con- 30 stituted under the reserve bank of india act, 1934; s of it, (;) "scheduled bank" means a bank for the time being indues· ed in the second schedule to the reserve bank of india aet, 1834; and (k) "state co-operative bank" has the same meanil1l u iii js the reserve bank of india act, 1934  chapter ii zwrabliskment and capital of the agricultural refinancz corpora tion 3 (1) with effect from such date as the central government may ~!ibmcnt - by notification in the official gazette appoint, there shall be estab- :v:~ lished for the purposes of this act a corporation to be known as the ~~twal agricultural refinance corporation c!~ioa (2) the corporation shall be a body corporate with the name aforesaid, having perpetual succession and" a common seal with power, 10 subject to the provisions of this act, to acquire, hold and dispose of property, and to contract, and may by that name sue and be sued  the corporation shall 8tablish its head office in bombay and oe:ad may, with the previous approval of the reserve bank, establish ofbeeb "c i or a"endes in other places in india 15 5 (1) the authorised capital oj the corporation shall be twenty- :=re:!cai five crores of rupees divided into twenty-five thousand fully paid-up bolden shares of ten thousand rupees each of which five thousand shares of the total value of five crores of rupees shall be issued in the first instance, apd the remaining shares may, with the sanction of the (2) of the capital issued in the first instance and before such date as may be notified by the central government in the official gazette in this behalf-~o central government, be issued from time to time by the corporation as and when the corporation may deem fit -, r (a) the reserve bank shall subscribe for two thousand five hundred shares; (b) central land mortgage banks and state co-operative banks may subscribe for one thousand five hundred shares; (c) scheduled banks, the life insurance corporation, insur-30 ance and investment companies and such other classes of financial institutions as may be notified by the central government in the oftlcial gazette in this behalf may subscribe for one thousand _hares (3) the allotment of shares to the institutions mentioned in clauses 35 (b) and (c) of sub-section (2) shall be made by the board in accordance with the regulations made in this behalf: provided that no such institution shall be allotted more than ten per cent of the shares reserved for the class of institutions to which it belongs (4) if any shares referred to in clause (b) and (e) of sub-section (2) remain unauotted, they shall be subscribed for by the reeerve bank: provided that the reserve bank may dispose of the· shares 8ubscribed for by it in pursuance of thi sub-section, to any instimiod"si" mentioned in clauses (b) and (e) of sub-section (2), 80 howey, ' that-(i) the institutions referred to in the said clause (b) shall, not together hold more than one thousand five hundred shbres~ : and the institutions referred to in the said clause (e) ahalino\" '10' together hold more than one thousand shares, and (ii) no institution shall hold more than ten per cent of the shares reserved for the class of institutions to which it belemgs (5) if and when the remaining shares or any part thereof are issued, the reserve bank shall, and the institutions referred to in!s clauses (b) and (c) of sub-section (2) may, subscribe for such' shares in the same proportion as for the first issue and the proviaiodi ofaub-sections (3) and (4), except clause (ii) of the proviso to jub' section (4), shall also apply to such shares (6) shares of the corporation shall not be transferable except- 20 (a) to the institutions specified in clauses (a), (b) and ,(e) of sub-section (2), and (b) in accordance with the regulations made in this behalf guarantee ~ central government 6 shares of the corporation shall be guaranteed by the central goyemmeat as to the i'epayment of the prineipal  the 'payment 2s of;a minimum addual dividend at sueh rate a may be 8ud ity, rthe cual govet'ludeftt by ilotificaticm in the official goette at the ti  ,of issuijaethe shares sham of corporation to be deemed to be iccuritie for certain purposes 7 not"ithstanding anything contained in the acts hereinafter mentioned in this section, the shares of the corporation shall be 30 deemed to be included among the securities enumerated in section 20 of thelndian trusts act, 1882, and be also deemed to be apprqvld ~ of 18b securities for the ,purposes of the -1nsuraru:e act, 1938 alld the bank- "  of 1938 ing companies act, 1949 10 of 194' 8 (1) the cqrporation shall maintain as its head office a register resistor of of the shareholders and shall enter therein the following particulars lhareholdcn so far as they may be available, namely:-s (i) the names and addresses of the shareholders and a statement of the shares held by each shareholder, distinguishing each share by its denotfng number; (ii) the date on which each person is entered as a shareholder; (iii) the date on which any person ceases to be a shareholder; and 10 (iv) such other particulars as may be prescribed (2) notwithstanding anything contained in this act or in any other law for the time being ill force, no notice of any trust, express, implied or constructive, shall be entered on the register maintained under sub-section (1) or be receivable by the corporation is  chapl'erm management of the corporation9 (1) the general superintendence, direction and management of ~::ae­the affairs and business of the corporation shall vest in a board of 20 directors which may exercise all such powers and do all such act and things as may be exercised or done by the corporation (2) the board in discharging its functions shall act on businesl principles with due regard to public interest 10 the board of directors shall consist of the following, namely: -board of ; djrcctol'l (a) a deputy govemar of the reserve bank nominated by that bank, who shall be the chairman of the board; (b) a director nominated by the reserve bank; (c) three officers of the central government nominated by that government: (d) one director elected in the prescribed manner by such 40 of the central lana mortgage banks as are shareholders of the corporation; (e) one director elected in the prescribed manner by such of the state co-operative banks as are sharehcl<fers of the corporation; (1) one director elected in the prescribed manner by the life insurance corporation, scheduled banks, insurance and in-5 vestment companies and other financial institutions, which are shareholders of the corporation; and (g) a managing director to be appointed by the reserve bank and, except in the case of the first appointment, after consultation with the board: 10 provided that on the first constitution of the bokrd, the directors referred to in clauses (d), (e) and (1) shall be nominated by the central government and the directors 80 nominated shall, for the purposes of this, act, be deemed to be elected directors: 15 provided further that the directors so nominated shall hold office until the conclusion of the first annual general meeting of the corporation term of 11 (1) a nominated director shall hold office during the pleasure ~=::! cit' of the authority nominating him 20 directon and payment of (2) an e~ected director, other than a director deemed to be electfeel to them ed under the first proviso to section 10, shall hold office for four years: provided that an elected director shall continue in office until his successor has been elected and shall also be eligible for il"e-elec- 25 tion but shall not hold office for more than two consecutive terms (3) a casual vacancy in the office of an elected director shan be filled by election and a director so elected shall hold office for the unexpired portion of the term of his predecessor: provided that no casual vacancr occurring within three months 30 of the date of expiry of the normal term of oftlce of an elected director need be filled under this sub-section (4) directors shali be paid such fees and allowances aa may be prescribed for attending the meetings of the board or of any of its committees and for attending to any other work of the corporation: 3s provided that no fees shall be payable to the chairman, managing director or to any other director who is an oftlcer of the govemment or ef the reserve bank lz no person shall be a director who-disqualifi-(a) except in the case of the managing director, is a sala- cations ried official of the corporation; or (b) is, or at any time has been, adjudicated insolvent or has 5 suspended payment of his debts or has compounded with his creditors; or (c) is of unsound mind and stands so declared by a competent court; or' 10 (d) is or has been convicted of any offence which, in the opinion of the central government, involves moral turpitude 13 (1) if a director-vacation and rcsignation gf officc by men- directors (0) becomes subject to any of the disqualifications tioned jn section 12; or (b) is absent without leave of the board from more than is three consecutive meetings thereof, his seat shall thereupon become vacant (2) any director elected under clause (d), or clause (e) or clause <f) of section 10 may resign his office by giving notice thereof in writing to the board and, on such resignation being accepted, shall 20 be deemed to have vacated his office it (1) the managing director ~hall-managinl director (a) be a whole-time officer of the corporation; (b) perform such duties as the board may entrust or delegate to him; 25 (c) hold oftlce for such term not exceeding five years as the reserve bank may at the time of appointment specify and be eligible for re-appointment; and (d) receive such salary and allowances and be governed by such terms and conditions of service as the board, with the previous apprpval of the reserve bank, may determine: provided that the first managing director shall receive such salary and allowances and begovemed by such terms and conditions of service as the reserve bank may determine (2) the reserve bank may at any time, after consultation with the board, remove the managing director from office casual 15 if the managing director is by infirmity or otherwise rendered ~c:anoffiiea ~ incapable of carrying out his duties or is absent on leave or other-:u~ wise, in circumstances not involving the vacation of his appoint- 5 direc:tar ment, the reserve bank may, after consultation with the board, appoint another person to act in his place during his absence meetinl8 of 16 (1) the board shall meet at such times and places and shall baud observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed (0 (2) the chairman, or, if for any reason he is unable to attend any meeting, any other director elected by the directors present at the meeting shallpreside at the meeting of the board (3) all questions which come up before any meeting of the board shall be decided by a majority of votes of the members 15 present and voting, and, in the event of an equality of votes, the chairman or, in his absence, the person presiding, shall have a second or casting vote committeel 17 (1) the board may constitute an executive committee conol corpora silting of such number of directors as may be prescribed ~ tioa (2) the executive committee shall discharge such functions as may be prescribed or may be delegated to it by the board (3) the board may constitute such other committees, whether consisting wholly of directors or wholly of other persqds or partly of directors and partly of other persona as it thinks fit and for such 25 purposes 8s it may decide i (4) a committee constituted under this section shall meet at such times and places and shall observe such rules and procedure in regard to the transaction of business of its meetings as may be· prescl"ibed i 30 (5) the members of a committee (other than the directors ·of the board), shall be paid by the corporation such fees and allowances as may be prescribed for attending its meetings and for attending to any other work of the corporation 18 a director of the board or a member of a committee who has member of any direct or indirect pecuniary interest in any matter coming up board !,r for consideration at a meeting of the board or a committee thereof, ~::r;~ shall, as soon as possible after relevant circumstances have come to to yo~c in 5 his knowledge, disclose the nature of his interest at such meeting and :::n the disclosure shall be recorded in the minutes of the board or the committee, as the case may be, and the director or member shall not take any part in any deliberation or decision of the board or the committee with respect to that matter  chapter iv10  funds and business of the corporation19 the central government shall, after due appropriation made central goby parliament by law in this behalf, make to the corporation an vemmcnt to - makea loan idterestfree loan of five crores of rupees, repayable in fifteen equal of five 15 annual instalments commencing on the expiry of a period of fifteen crore8 of years from the date of receipt of the loan: rupecs provided that the central government may, on a request being made to it by the corporation, increase the number of instalments or alter the amount of any instalment or vary the date on which any 20 instalment is payable zoo (1) the corporation may, for the purpose of carrying out its borrowinsl functions under this act, with the previous approval of the central :~~?!~ government-2s (a) issue and sell bonds and debentures carrying interest, which bonds and debentures shall be guaranteed by the central government as to the repayment of principal and payment fd interest at such rates as may be fixed by the central govern ment at the time the bonds or debentures are issued; 30 (b) borrow money from the reserve bank repayable on the expiry of fixed periods not exceeding eighteen months from the date of the making of the loan or advance, against the security of stocks, f1;lnds and securitj~s (other than immov· able property) in which a trustee is authorised to invest trust money by any law for the time being in force in india; 3s (c) borrow money from the central government and from any other authority or organisation or institution approved by that government, on such terms and conditions as may be agreed upon; and i (d) accept from the central government, a state government, a local authority, a central land mortgage bank, a state c()-()perative bank, a scgeduied bank or any person, deposits repayable after the expiry of n vriod nhich sholi not be less than twelve months from the date of the making of the deposit and on such other terms as the corporation may, with the prior approval of the reserve bank, fix s (2) the amount of loan granted by the central government under section 19 and outstanding, together with the amount of bonds and debentures issued under clause (a) of sub-section (1) and outstanding, the amounts borrowed by the corporation and outstanding under clauses (b) and (c) of that sub-section and· the 10 - amount of deposits accepted under clause (d) of that sub-section, shall not at any time in the aggregate exceed twenty times the amount of the paid-up share capital and the reserve fund of the corporation loans foreign currency in 21 (1) notwithstanding anything contained in the foreign ex- is change regulation act, 1947, or in any other law for the time being 7 of 1947· in force relating to foreign exchange, the corporation may, for the purpose of granting loans and advances to eligible institutions, borrow, with the previous consent of the central government, foreign currency from any bank or financial institution in india or else- 20 wherej (2) the central government may guarantee loans taken by the corporation under sub-section (1) as to the repayment of principal and the payment of intere§t thereon and other incidental charges 25 (3) all loans and advances made to eligible institutions out of foreign currency borrowed under sub-section (1) shall be granted in indian currency and shall be repayable by such institutions in indian currency (4) any loss occurring or profit accruing in connection with any 30 borrowing of foreign currency under sub-section (1) for the purpose of granting loans or advances to any eligible institution or its repayment, on account of any fluctuations in the rates 9f exchange shall be reimbursed by, or paid to, the eligible institution bu,iness ft (1) the corporation may provide such financial assistance 35 weohkh  the to eligible institutions as it considers necessary for promoting the rporatlon  may trbrui-development of agriculture in india and shall notact (a) trans"ct any busine~ except for that pu~e, and (b) grant, except as hereinafter provided, loans and advances otherwise than by way of refinance:  (2) no institution other than an eiigible institution shall be entitled to assistance under sub-section (1) 5 (3) subject to- the provisions of sub-sections (1) and (2), the corporation may transact the several kinds of business hereinafter specified, namely:-, (a) the granting of loans and advances by way of refinance to an eligible institution mentioned in sub-clause (i) of clause 10 (1) of section 2, repayable within a period not exceeding twentyfive years from the dates on which they are granted; (b) the granting of loans and advances otherwise than by way of refinance to an eligible institution mentioned in sub-clause (ii) of clause </> of section 2 repayable within a period not ex-is ceeding twenty-five years from the dates un which they are granted; (c) the subscribing to the debentures of any eligible institution repayable within a period not exceeding twenty-five years from the dates on which they are issued: 20 provided that repayment of principal and payment of interest thereon are fully and unconditionally guaranteed by government; (d) the guaranteeing, with the prior approval of the central government and on such terms and conditions as may be 2s agreed upon, of deferred payments in connection with the purchase of capital goods from outside india, (i) due from an eligible institution mentioned in subclause (ii) of clause (i) of section 2; or (ii) due from any other person and guaranteed to the 3') corporation by one of the eligible institutions mentioned in sub-clause (i) of clause (i) of section 2; (e) acting as agent for the central govenunent or a state govemment in the transaction of any business with ail eligible institution in respect of loans and advances granted or to be jl'anted, or debentures subscribed for or to be subscribed for, by such government; and (1) generally, the doing of all such matters and things as may be incidental to or consequential upon the discharge of its functions under this acl 5 (4) no accommodation shall be granted under clauses (a), (b) and, (d) of sub-section (3) to an eligible institution unless it is fully and unconditionally guaranteed as to the repayment of principal and payment of interest by government: provided that no such guarantee shall be required in cases in 10 which an eligible institution makes available other security to the satisfaction of the board: provided further that any sums received by a scheduled bank in repayment or realisation of loans and advances refinanced either wholly or partly by the corporation shall, to the extent of the accom- 15 modation granted by the corporation remaining outstanding, be deemed to have been received by the scheduled bank in trust for the corporation, and shall accordingly be paid by such scheduled bank to the corporation (5) the corporation shall not grant any loan or advance on the 20 security of its own shares, bonds or debentures or for the purpose of providing working capital i (6) the corporation may receive, for the rendering of any of the services mentioned in sub-section (3), such commission or other consideration as may be agreed upon 25 (7) if any question arises whether a transaction undertaken by the corporation is for the purpose of providing finance or refinance for the development of agriculture in india, the matter shall be referred to the reserve bank and the decision of the reserve bank thereupon shall be final 30 limit of accommodation 23 the corporation shall not, without the prior approval in writing of the reserve bank, enter into any transaction under clause (a) or clause (b) or clause (c) of sub-section (3) of section 22 involving an amount exceeding fifty lakhs of rupees power to ~-24 in entering into any transaction under section 22 with an 35 p'0lle c:rnd1-eligible institution, the corporation may impose such conditions as tlonao  - accommoda- it may think necessary or expedient for protecting the interests of don the corporation i 25, notwithstanding anyth~ng to the contrary contained in any power to c:ajj agreement, the corporation may, by notice in writing require any for repayel'g'bl ' tit t' h" 'ment before ,lie ins u ion to w lch it has granted any loan or advance to ,reed discharge forthwith in full its liabilities to the corporation: _ period 5 (a) if it appears to the board that false or misleading information in any material particular was given in the application for the loan or advance; or 10 (b) if the eligible institution has failed to comply with any of the terms of its contract with the corporation in the matter of the loan or advance; or (c) if there is a reasonable apprehension that the eligible institution is unable to pay its debts or that proceedings for liquidation may be commenced in respect thereof; or (d) if for any reason it is necessary to do so to protect the is interests of the corporation, 26, all moneys belonging to the corpomtion which may not for depoeit the time being be required by it shall be invested in promissory ::f::'tnotes, stock or securities of the central government and all other iiiicdii moneys shall be deposited with the reserve bank or wi1lh any agency 20 of the reserve bank or, in consultation with the reserve bank, with a state co-operative bank or a scheduled bank,  chapter v account and audit ;!! , 27, (1) the balance-sheet and accounts of the corporation shall be pret::ticll 2s prepared and maintained in such form and manner as may be pres- :~t e:::;-of cribed, corpo:'at~ (2) the board shall cause the books and accounts of the cor'!>qration to be balanced and closed as on the thirtieth day of june, each year !iio  28 (l) the corporation shall establish a reserve fund by transfer- dispoealof ~  , ~~ ring such sums as it may deem fit out of its net annual profits before declaring a dividend, (2) after making provision for bad and doubtful debts, depreciation of assets and all other matters whic;h ~re usually provided for by ~~rs, the corporation may out of its net annual profits declare a dividend: ' ;  t provided that for so long as the reserve fund is less than the' paidup share capital of the corporation and until there have been repaid to the central government such sums, if any, as that government s may have paid under the guarantee given in pursuance of section 6 or under any guarantee given in pursuance of sub-section (1) of section 20 or sub-section (2) of section 21, the rate of such dividend shall not exceed the rate guaranteed by the central government under section 6 10 = 29 (1) for a period of fifteen accounting years foj)owii;lg the accounting year during which the corporation is established, all cuv,fpends accruing on the shares of the corporation held by the ~enre bank shall, irstead of being paid to that bank, be held by the c'orporation as a special deposit in a separate account and no interest 1$ shall be payable on such deposit (2), on the expiry of the period referred to in sub-~ctiob (1), the corporation shall, if so required by the reserv'e bank, pay to it the said special deposit and in c~se the reserve bank does not require the same to be paid to it, continue the said special deposit on:'such ao temis and on such conditions, including payment of iriterest;' and 'for such period as may be mutually agreed upon between thecorporatlon and the reserve bank (3) no shareholder of the corporation other than the reserve bank shall have any claim to the special deposit referred to in sub- 2, netion (1) milk 30 (1) the affairs of the· corporation shall be audited by an auditor duly qualified to act as auditor under sub-sectio,n (1) of sectiqn ~ of the companies act, 1956, who shall be app~dnted by the i of its' ~~rd with, the previous approval of the reserve' bank and ihall 30 receive such remuneration from the corporation as the bobrd may, with the approval of the reserve bank, fix: provided that tpe first auditor shall be appointed by the reserve bank within one month from the establishment of the corporation on such tenns and conditions as the reserve bank may determine 35 (~) the auditor so appointed shall hold office from the conclusion pja~ annual general meeting of the corporation until the conclusion of the next annual general meeting: :  provided tha,t the first auditor shall hold office until the conelueion of the first annual general meeting (3)  the awiitor shall be supplied with a copy of the annu"' balance-sheet qf the corporation and it shall be his duty to examine it together with the accounts and vouchers relating thereto and he shll11 have; a list delivered to him of all books kept by the corporation 5 and shall at all reasonable times have access to the books, accountl, vouoben and other documents of the corporation (4) the auditor may, in relation to the accounts of the cot"pol'a- tion, examine any director of the board or any officer or employee of the corporation, and shall be entitled to require from the officers· of 10 the corporation such information and explanation as he may think necessary for the performance of his duties (5) the auditor shall make a report to the corporation upon the annual palance-sheet and accounts examined by him and in every such re~t he shall state whether in his opinion the balance-sheetii 15 a full and fair balance-sheet containing all necessary particulars and p~~rly drawn up so as to exhibit a true and fair view of ~he ist~~~i of affairs of the corporation and in cage he had called for any exp~~'i' nation or information from the board, whether it has been given ali!! whether it is satisfactory :ao (6) without prejudice to anything contained in the preceding sul?:-sections, the central government may at any time ·appoint the comjr, troller and auditor-general of india to examine and report upq~' the accounts of the corporation, and any e~penditure incurred by him in con~tion with such examination and report !lihall be payable 2$' by the corporation to the comptroller and auditor-general of india; 31 (1) a 'general meeting shall be held annually (hereinafter geaeri referred to as the annual general meeting) at a place in india  where there is an office of the corporation within three months from the date on which the annual accounts of the corporation are 30 closed, and any other general meeting may be convened by the board at any other time ptovidt!d that the central government may extend the time wt~l\­in which 'any annual general meeting shall be held, by a period not exceeding one month 55 (2) the shareholders present at the annual general meeting shall be entitled to discuss the annual accounts, the report of the board on the working of the corporation throughout the year and the auditor', report gin the annual balance-sheet and accounts leturd8~ 32 (1) the corporation shall furnish, from time to time, to the central government and to the reserve batlk such returns as the central government or the reserve bank may require, (2) the corporation shall furnish to the central government and the reserve bank within fifteen days of the conclusion of the an-5 nual general meeting in respect of any year, a copy of its balancesheet as on the close of that year together with a profit and loss account for the year and a report of the working of the corporation during the year, and copies of the said balance-sheet, profit and loss account and report shall be published in the official gazette and 10 shall be laid before each house of parliament  chapter vi miscellaneous~o,,~ of 33 in the discharge of its functions under this act, the corporao:ctnment tion shall be guided by such directions in matters of policy involving is ~~ ip~ public interest as the central government may after consulting the  treet na reserve b~k give to it in writing, and if any question arises whether the direction relates to a matter of policy involving public interest, the decision of the central government thereon shall be final sta1fof  m (1) the corporation may appoint such number of staff as it 20 corporation considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service (2) without prejudice to the provisions of sub-section (1), it shall be lawful for the corporation to utilise, and for the reserve bank 2s to make available the services of, such staft of the reserve bank on s1tch terms and conditions as may be agreed upon between the corporation and the reserve bank col'p<!ration to haft 8cceii to re:orda 35 (1) the corporation shall have free access to all such records of an eligible institution or any person availing of a loan or advance 30 from such eligible institution perusal whereof may appear to the corporation to be necessary in connection with the providing of finance or other assistance to such eligible institution or the refinancing of the loan or advance made to such person by the eligible institution (2) the corporation may require any eligible institution or person 35 referred to in sub-section (1) to furnish to it copies of any of the records referred to in that sub-section and the eligible institution or the person, as the case may be, shall be bound to comply with such requishfon 38 the corporation shall be deemed to be a bank for the pur- act 18 of poses of the bankers' books evidence act, 1891 1891 to apply to books of corporation 37 no provision of law relating to the winding up of companies li uidation or corporations shall apply to the corporation, and the corporation o~ ~rpora-5 shall not be placed in liquidation save by order of the central gov- tlon emment and in such manner as it may direct 38 (1) every director shall be indemnified by the corporation indemnity against all losses and expenses incurred by him in, or in relation to, of directors the discharge of his duties, except such as are caused by his own wil-10 ful act or default (2) a director shall not be responsible for any other director or for any officer or other employee of the corporation or for any loss or expenses resulting to the corporation from the insufficiency or deficiency of value of, or title to, any property or security acquired is or taken on behalf of the corporation or the insolvency or wrongful act of any debtor or any person under obligation to the corporation or anything done in good faith in the execution of the duties of his office in relation thereto 31 (1) no act or proceeding of the board or of any committee of dcf~ in 20 the corporation shall be questioned on the ground merely of the :~~~~::'l existence of any vacancy in, or defect in the constitution of, the board udate actr, or committee or on the ground of any director or member of any etc committee having acted or taken part in any proceeding in contravention of section 18, 25 (2) no act done by any person acting in good faith as a director of the board or as a member of a committee of the corporation shall be deemed to be invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment 40 no suit or other legal proceeding shall lie against the corpora- protection 30 tion or any director or any officer of the corporation or any other per- ~~e~~~er son authorised by the corporation to discharge any functions under the act this act for any loss or damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this act 35 41 every director, auditor, officer, or other employee of the cor- declara~it't1 f h r b k h  of fidehty poration or any employee o t e eserve an, w ose serylces are and secrecy utilised by the corporation under sub-section (2) of section 34, shall, before entering upon his duties, make a declaration of fidelity md secrecy in the form set out in the first schedule to this act 42 any sum paid by the central government under the ·luarad-tee given in pursuance of section 6 or, under any guarantee given in pursuance of sub-section (1) of section 20 or sub-section (2) of section 21 shall not be treated as the income, profits and rains of the corporation, and any interest paid by the corporation on deben- s tures or bonds or on foreign currency borrowed ·under sub-section (1) of section 21 out of such sum shall not be treated for the purpose of income-tax or super-tax as expenditure incurred by it: provided that in the case of any shareholder sucla portion of - dividend as has been paid out of any such sum advanced by the 10 central government shall be deemed to be his ·income from interest on securities declared to be income-tax free within the meaaidg of clause (i) of section 86 of the income tax act, 1961 430h96l delegation of powe·s 43 the board may, by general or special order, delegate to any committee of the board or to the chairman or managing director or 15 any other officer of the corporation, subject to such conditions and limitations, if any, as may be specified in the order, sucjl of its powers and duties under this act as it may deem necessary penalties 44 (1) whoever in any return, balance-sheet, or other document or in any information required or furnished by or under or for the 20 purposes of any provision of this act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine 25 (2) if any person fails to produce any book, account or other document, or to furnish any statement or information which, under the provisions of this act, it is his duty to produce or furnish, he shall be punishable with a fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with 30 an additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the first such failure offences by companies 45 (1) where an offence has been committed by a company, every person who, at the time the offence was committed, was·in 'charge of, 135 and was responsible to the company for the conduct of the ·business of the company, as well as the company, shall be deemed to beguilty of the offence and shall be liable to be proceeded against and punished accordingly: provided that nothing contained in this sub-section shall render 40 any such person liable to any punishment provided in this act, if h1! proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence (2) notwithstanding anything contained in sub-section (1), where 5 an offence under this act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any -director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to 10 be guilty of that offence and shall be liable to be proceeded agains\ and punished accordingly explanation-for the purposes of this section-(a) "company" means any body corporate and includes a firm or othw association of individuals; and is (b) "director", in relation to a firm, means a partner in the firm 46 (1) the board may, with the previous approval of the reserve powcn of bank, make regulations not inconsistent with this act to provide for =d ~~gu_ all matters for which provision is necessary or expedient for the pur- ltions zo pose of giving effect to the provisions of this act (2) in particular and without prejudice to the generality of the  foreioing power, such regulations may provid~ for-(a) the manner in which and the conditions subject to which the first allotment of shares of the corporation shall be made; 25 (b) the manner in which and the conditions subject to which the shares of the corporation may be held and transferred, and generally all 'matters relating to the rights and duties of the shareholders; (c) the holding and conduct of elections under this act, 30 including the final decision on doubts or disputes regarding the validity of elections; (d) the manner in which general meetings shell be convened, the procedure to be followed thereat and the manner in which voting rights may be exercised; (e) the fees or allowances that may be paid to the direc~ors; (f) the times and places of the meetings of the board or of any committee constituted under this act and the procedure to be followed at such meetings including the quorum necessary for the transaction of business; (g) the number of directors constituting the executive committee, end the functions that such committee shall discharge; (h) the functions which any other committee may discharge 5 under this act; (i) the fees and allowances that may be paid to the members of a committee other than directors; (;) the manner and terms of issue and redemption of bonds and debentures by the corporation; 10 (k) the conditions which the corporation may impose in granting loans wld advances; (i) the manner and conditions subject to which the corporation may borrow in foreign currency; (m) the form and manner in which the balance-sheet and 15 the accounts of the corporation shall be prepared or maintained; (n) the forms of returns and statements required under this act; (0) the duties and conduct, salaries, allowances and conditions of service of officers and other employees; 20 (p) the establishment and maintenance of provident or other benefit funds for" employees of the corporation; and (q) generally, the efficient conduct of the affairs of the corporation (3) any regulation which may be made by the board under this 25 act may be made by the reserve bank within" three months of the establishment of the corpomtion; and any regulation so made may be altered or rescinded by the board in the exercise of its powers under this act (4) no regulations made under this act shall have effect until 30 they are published in the official gazette " (5) all regulations made under this act shall be placed before each house of parliament amcnd~cnt 47 the enactments specified in the second schedule to this act ~ta shall be emended in the manner provided therein 35  (see section 41) decl4ration of fidelity 4nd secrecyi do hereby declare that i will faithfully, truly and to the best 5 of my akill and ability execute and perform the duties required of me as director, auditor, officer or other employee (as the case may be) of the agricultural refinance corporation and which properly relate to the oftice or position held by me in the said corporation i further declare that i will not communicate or allow to be com-10 municated to any person not legally entitled thereto any infonnation relating to the aftairs of the agricultural refinance corporation or to the affairs of any person having any dealing with the said corporation; nor wul i allow any such person to inspect or have access to any books or documents belonging to or in the possession of the 15 agricultural refinance corporation and relating to the business of the said corporation or the business of any person having any dealing with the said corporation -(signature) sigfted before me  the second schedule (see section 47)a meftdmentl of oert4i" enactment  part i ajmmments to 'ftdl ri:savi: bank or india ar:r, 1934 (2 of 1934:) amendmentl1 in aect10n 2, for clause (4), substitute the f01low1ng clauset, umely:-'(4) "agricultural reftnanee corporation" means the agri-cultural refinance corporation establlshed under section 3 - af 30 the agricultural rlaflnanee coj1)oration aot, i9&!; - (cia) "the bank" means the reserve bank of india constituted by this act;' 2 in section 17,-(4) after clause (4d), insert the following clause, namely:-"(4e) the making to the agricultural refinance cor- s poration of loans and advances repayable on the expiry of tbfed periods not exceeding eighteen months from the date of the making of the loan or advance, against the security of stocks, funds and securities· (other than immovable· property) in which a trustee is authorised to invest trust money 10 "by any law for the time being in force in india"; (b) in clause (sa), after the words "the capital of", inaert the words "the agricultural refinance corporation," pailt n ~ to the indu8'l'itial dlaru lis act, lm7 (14 01" 1947) is in section 2, in sub-elause (i) of clause (a) after the words ''to any industrial dispute concerning" insert the words ''the agricultural refinance corporation established under section 3 of the agricultural refinance corporation act, 1962, or"  statliment of obiocts and reasonsthe question of establishing an independent statutory corporation for facilitating the provision of term credit for agricultural development has been under consideration for some time the new institution is intended to assist projects which cannot ordinarily be financed by·estabushed agencies suebas the apex co-operative and land mortgage banks, either because the amounts involved in each individual scheme or project are very large or because the period for which credit is necessary is relatively long the new corporation will be predeminantly a refinancing agency, providing the necessary resources for· these purposes to other· primary lenders 2 it has been considered desirable, in view of the important role whieh the·new corporation is expected to play in promoting'the developmeat of agriculture and other allied activities, that its duties, rights and obligations should be prescribed clearly by law: the bill is intended to gcve effect to the arrangements which have been proposed in connection with the establishment of the corporation the notes on clauses explain in detail the various provisions of the bill nbwdelm; morarji desai tha'2ge~ november, 1962 clause 2 defines the words and expressions used in the bill agriculture, in accordance with the deftni1ion for the purposes of the bill will include animal husbandry, dairy farming, pisciculture, poultry farming and stock breeding eligible institutions will normally be the state co-operative and the state land mortgage banks and they will be entitled to the facility of refinance in respect of" loans or advances made by thenl, but it will be open to the corporation, with the approval of the reserve bank, to treat any co-operative society as an eligible institution for the purpose of granting loans or advances directly to it clauses 3 and 4 provide for the establjsbment of the corporation, the location of its head office at bombay, and the other offices or agencies of the corporation clauses 5 to 7 provide fer the capital structure, the allotment of shares and the ownership of the corporation the authoriied capital will be ri 25 crores  a sum of ri 5 crores out of the corporation's authorised capital will be issued and paid-up in the first instance fifty per cent of the capital thus issued and paid-up will be allotted to the reserve bank an amount not exceeding thirty per cent may be allotted, on application, to state co-operative and land mortgage banks, while an amount not exceeding twenty per cent may be allotted to scheduled banks, the life insurance corporation, insurance and investment companies and other financial institutions shares which are not taken up within the respective categories, by the institutions for which they are intended will be allotted to the reserve bank in addition to its normal fifty per cent share, but such shares, acquired in excess of its statutory minimum holdings, may be transferred by the reserve bank at a later stage to the institutions which are eligible to_, or to become, shareholders of the corporation, within the quotas earmarked for each category, so long as the effect of such transfers is not to increase the holding of any individual institution beyond ten per cent of the total value of the shares intended for the category to which it beloags any issue of capital, after the initial amount of rs 5 crares hu been allotted and paid-up, will be offered in the proportions in which the initial issue was intended to be allotted, but the ceiling for shareholding by any individual institution will not be enforced at th!a 81l 18 clat&beb 6 and '1 provide for the shares of the corporation being guaranteed by the central government as to the repayment of the principal and the payment of dividends at a rate to be determined by the central government clause 7 provides that the shares of the corporation shall be deemed to be trustee securities or approved securities for the purposes of the trusts act, the banking companies act and the insurance act clause 8 provides for a register of shareholders to be maintained by the corporation and also makes it clear that notices of trusts in respect of the shares shall not be receivable by, or bind, the corporation clauses 9 to 15 provide for the board of directors of the corporation the corporation will have nine directors with a deputy governor of the reserve bank as the chairman three nominees of the central government, one nominee of the reserve bank, one elected director each representing the state co-operative banks, the state land mortgage banks, 6lld all the other financial institutions which are shareholders, will be ordinary directors a managing director will be appointed with the approval of the reserve bank the provisions regarding the terms of office and qualifications for appointment as directors are based generally on the corresponding provisions relating to the state-associated banks and the deposit insurance corporation clauses 16 to 18 provide for meetings of the board of directors and its committees, subject to the regulations which are to be made for the purpose it has been provided that interested directors shall not participate at these meetings clause 19 provides for the grant of an interest-free loan of rs 5 crores to the corporation for a period of fifteen years it is intended that the investment income on this amount should be available to the corporation for enabling it to meet its expenses durins this period clause 20 provides for the borrowing of money by the corporation (8) by the issue of bonds or debentures, (b) from the reserve bank against trustee securities for periods not exceeding eighteen months and (c) from the central government or other institutions approved by the government and for the acceptance of deposits from the public for fixed periods of twelve months or more the total amowlt baitowed under clauses 19 and 20 is not to exceed twenty times the paid-up capital and reservea clawe 21 provides for the borrowing of money !n foteiijl cur  rency by the c01'p9ration against the guarantee of the ceatral government clause 22 provides that the corporation shall grant assistance to eligible institutions only for the purpose of promoting agricultural development the assistance provided by the corporation will normally be in the form of refinance against loans or advances granted by the state co-operative, state land mortgage and scheduled banks for periods not exceeding twenty-five years or in the form of subscriptions to the debentures of land mortgage banks for similar periods, dut in certain exceptional cases, direct assistance to co-operative societies recognised by the corporation for this purpose with the approval of the reserve bank may also be granted the· amounts due to the corporation from institutions which are assisted by it will be guaranteed by the state governments ~deerned czauh 23 restricts the amount of the assistance granted by the corporation in connection with any individual transaction to bs 50 lakhs cl4vres 24 and 2s provide for the grant of powers to the corporation to impose suitable conditions in regard to its loads or to call up' its loans before the due dates, if it is considered necessary or expedient to do so clause 26 provides for the investment of the surplus funds of the corporation in securities of the central government and for the other funds with the reserve bank or with co-openltive or scheduled banks approved by the reserve bank clauses 27 and 28--clause 27 provides for the preparation of ballfulce-sheets as at the end of the co-operative year, ie at the end of june and clause 28 provides for the grant of a dividend from ·out of the surplus profits of the corporation and for the restriction: of the rate of this dividend while any amount remains due to be paid to the central government on account of its guarantee clause 29 provides for the dividends accruing to tae reserve bank during a period of fifteen years to be deposited free of interest with 'the corporation and for the continuance or return of the deposit after that period the intentfon is to permit the grant of ways and meant··assistance to the corporation and to enable it to utilise for its own purposes the 'investn1ent income on account of the&ef\idda clauses 30 to 32 make the usual provisions regarding audit, including a special audit by the comptroller and auditor-genenl in case this becomes necessary the holding of a general meeting and the submission of the accounts and the annual report to the central government and parliament claule 33 enables the central government to give directions to the corporation in regard to matters of policy involving the public interest clauses 34 to· 36 am 38 to 40 provide for the recruitment of staft, 8efts8 to records essential for the corporation's purposes, the grant to the corporation of the facllities available under the bankers' books evidence act, the indemnity c)f directors, and the protection or ¥udation of action taken by the corporation c'l4use 37 provides that the corporation cannot be taken into liquidation except in accordance with the orders of the central government cla:use 41 and the first schedule provide for declarations of fidelity and secrecy on the part of the directors and employees  clause42 makes it clear that any amount received by the corporation from the central government in pursuance of the central government's guarantee shall not be treated as income, profits or gains of the corporation for the purposes of income-tax or super-tax cla:uses 43 to 45 provide for the delegation of powers by the board of directors of the corporation and for penalties in respect of offenees, including offences by companies clawe 46 provides for regulations to be made by the board of directors of the corporation in order to carry out the purposes of the act clause 47 and the secemd schedule provide for consequential amendments of the reserve bank of india act, 1934, and for an amendment of the industrial disputes act, 1947 in order to make it clear that the appropriate government in relation to any industrial dispute involving the corporation will be the central government clause 6 of the bill provides that the shares of tire proposed corporation shall be guaranteed by the central government as to the repayment of principal and the payment of a minimum annual dividend at such rate as may be fixed by the central government clause 19 provides that the central government may after due appropriation by law grant an interest-free loan to the corporation of a sum not exceeding rs 5 crores sub-clause (1) (a) of clause 20 provides that the bonds and debentures issued by the corporation shall be guaranteed by the central government sub-clause 1 (e) of that clause provides for the grant of further loans, if necessary, by the central government to the corporation and sub-clause (2) of clause 21 provides that the central government may in addition guarantee loans in foreign currency obtained by the corporation from any financial institution clause 42 makes it clear that any sums which may have to be advanced to the corporation by the central government for ensuring the repayment of any principal or dividend guaranteed by the government will not attract income-tax 2 while provision will have to be made in pursuance of clause 19 for the grant of an interest-free loan of rs 5 crores to the corporation by the central government, it is not clear at this stage whether any further loans will be necessary or whether any payments will be necessary c?n account of any guarantees by that government  -  annexure extracts from the reserve bank of india act, 1934 (2 of 1934) - • - •2 in this act, unless there is enything repugnant in the subject definition, or context,-(a) "the bank" means the reserve bank of india constituted by this act; - - - - 17 - - - - business which the bank may tfansact (8a) the purchase an~ sale of shares in, or the capital of the deposit insurance corporation, the state bank or any other bank or financial institution notified by the central government in this behalf; - - - -  extract from the industrial disputes act, 1947(14 of 1947) - - - -  2 in this act, unless there is anything repugnant in the subject definitiens or context,-(a) "appropriate government" mean&-(i) in relation to any industrial dispute concerning the deposit insurance corporation established under section 3 of the deposit insurance corporation act, 1961, or any industry carried on by or under the authority of the central government or by a nillway company or concerning any such controlled industry as may be specified in this belialf 2277 (b) ls-5 by the central government or in relation to an industrial dispute concerning a banking or an insurance company, a mine, an oil-field, or a major port, the central government, and (ii) in relation to any other industrial dispute, the state government; - - - -  a billto provide for the establishment of a corporation for granting  medium and long term credit by way of refinance or otherwise, for the development of agriculture and for other matters connected therewith or incidental thereto the president has, in pursuance of clauses (1) and (3) of article 117 and clause (1) of article 274 of the constitution of india, recommended to lok sabha, the introduction and consideration of the bill m n kaul, secretary (shri morarji desai, minister of finance) 