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FOOD CORPORATIONS ACT, 1964

FOOD CORPORATIONS ACT, 1964

37 of 1964

STATEMENT OF OBJECTS AND REASONS It is considered desirable, in the interests of increased agricultural production as well as in the interests of the common consumer, to set up a State Agency for the purpose of undertaking trading in food grains in a commercial manner but within the framework of an over-all Government policy. Only by such a measure it will be possible to effectively implement any policy of ensuring that the primary producer obtains the minimum price that may be announced from time to time and to protect the consumer from the vagaries of speculative trade. 2. The setting up of the Food Corporation of India, as provided for in this Bill, will, therefore, he one of the essential and important steps in the implementation of Government's food policy. The Corporation will be the first organised attempt to take up State trading in foodstuffs on an appreciable scale. The Agency will also be used to build up gradually buffer stocks. 3. The Corporation will engage itself primarily in the purchase, storage, movement, distribution and sale of food grains. Provision has also been made in the Bill enabling the Corporation to deal in other foodstuffs if considered necessary by the Government. The Corporation may also discharge certain incidental functions as provided for in the Bill in consultation with the Central Government. (4) The Corporation will he encouraged to function generally as an autonomous organisation working on commercial lines. It is expected to secure for itself a strategic and commanding position in the foodgrains trade of the country. Bearing in mind the several large spheres in which the Corporation will ultimately have to operate, this Bill is being introduced to enable it to function as a statutory Corporation wholly owned by the Government. 5. It is necessary that the Corporation should work with the active and continued co-operation of State Governments and their machinery. The Bill, therefore, provides for the setting up of Boards of Management or State Food Corporations, as the case may be, to secure such co-operation and participation in a practical and effective way.-Gazette of India, 17.11.1964, Pt. II,

Sec. 2, Extra., p. 782. Amending Act 57 of 1968.--- With the establishment of Food Corporation of India under the Food corporations Act, 1964, the work relating to the storage, movement, distribution and sale of food grains, performed by the Regional Directorates under the Food Department of the Government, is being gradually transferred to the Food Corporation of India. The staff working in the Regional Directorates are also being transferred to the Corporation along with the work. The object of this Bill is to prescribe the conditions of service in regard to pay pension and other similar matters which would be applicable to the employees on their transfer to the Corporation. In doing so, care has been taken to ensure that the pay, pension and other conditions of service are not as far as possible, adversely affected on account of such transfer. 2. Opportunity is being taken to declare the Central Government as the "appropriate Government" underthe Industrial Disputes Act, 1947in relation to the Food Corporation of India.- Gazette of India, 25- 7-1967, Pt. II,Sec. 2, Extra., p. 613. Act 67 of 1972.-- In order to remove certain practical difficulties and deficiencies which have been experienced in the working of the Food Corporation Act, 1964, it is proposed to amend the Act suitably as explained in paragraphs 3 to 5. 2. The Food Corporations Act does not extend at present to the. State of Jammu and Kashmir. The Government of Jammu and Kashmir has requested that the activities of the Food Corporation of India should be extended to that State also. It is, therefore, proposed to extend the Act to that State. 3. Sub-section (2) ofsection 4of the Act requires the Food Corporation of India to obtain the previous approval of the Central Government before establishing offices or agencies in or outside India. With the increased utilisation of the services of the Corporation by the State Governments for the purposes of procurement and distribution of food grains, it has become necessary to establish local offices and agencies like "purchase centre" in various parts of the country. Obviously, the Corporation cannot perform its functions efficiently and effectively if it is required to obtain the previous approval of the Central Government each time it has to establish any office or agency. It is, therefore, proposed to dispense with the requirement in the Act of obtaining the previous approval of the Central Government for establishing offices and agencies within India. 4. In pursuance of the recommendations contained in paragraph 22, of the Report dated 12th November, 1970, of the Joint Select Committee to which the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Bill, 1969, was entrusted, it is proposed to amendsection 34of the Act for the purpose of empowering the Comptroller and Autidor-General's of India to direct the manner in which the accounts of a Food Corporation shall be audited, to have a supplementary or test audit done and to comment upon or supplement the audit report of the professional auditors. Provision is also being made insection 35whereby such comments or supplement made by the Comptroller and Auditor-General shall be laid before both Houses of Parliament. 5. The amendments proposed in Cls. 3 and 5 of the Bill are of a clarificatory nature, Under the former it is proposed to clarify that the expression "foodstuffs" used in Section 13of the Act also includes edible oils and oil seeds. This is intended to remove any possible doubts about the extent of the activities of the Food Corporation of India under the said Section 13. Similarly, Clause 5 of the Bill seeks to amend Section 27of the Act enabling a Food Corporation to borrow money from the Central Government also- - S.O.R. Gaz. of Ind., 16-11-72, Pt.11 S.2 Ext. p. 1093. Act 12 of 1977.-S. 12Aof the Food Corporations Act, 1964 regulates transfer of officers and staff working in the Food Deptt. of the Government of India to the Food Corporation of India (hereinafter referred to as the Corporation) as and when the work relating to purchase, storage, movement, distribution and sale of food grains performed by the Food Department was transferred to the Corporation. The said Section 12Aenvisages the exercise of two options by the said officers and staff. The first option is required to be given before the order of transfer is made to indicate as to whether the employee is willing to be transferred to the Corporation or not and the second has to be exercised within six months from the date of transfer as to whether he would like to be governed by the retirement benefits of the Central Government or of the Corporation. The date of formal transfer in the case of all those whose services were placed with the Corporation from time to time was fixed as 1st March, 1969 which corresponds to the date when the process of transfer of functions from the Food Department was completed. It took some time to secure the first option mentioned above and to get the service particulars from the employees with the result that even the first transfer order was issued only in 1972. The employees could not, therefore, give their option in regard to the retirement benefits as the period of six months from the date of transfer had already expired by the time the transfer orders were issued. In some cases employees have either died or retired before the issue of formal transfer orders or before exercising their second option. Formal orders of transfer are yet to be issued in respect of certain employees. In view of the above, cases relating to retirement benefits of many employees still remain unsettled. Keeping in view also the urgency to mitigate the financial hardship of such employees, it was considered necessary to amend the Food Corporations Act. 1964, by means of an Ordinance. Accordingly, the Food Corporations. (Amendment) Ordinance, 1976, was promulgated on 31st December, 1976. 2. The said Ordinance inter alia provided for the following matters, namely:- (i) The exercise of a fresh option in respect of retirement benefits to all serving employees of the Corporation within a period of six months from the date of commencement of the Ordinance irrespective of whether they had exercised the option earlier or not. (ii) In respect of those employees for whom formal orders of transfer are yet to be issued, the said option can be exercised within a period of six months from the date of such orders. (ill) The validation of all the options exercised by the employees who have either died or retired. (iv) Conferment of Central Government retirement benefits to certain employees as such benefits were more favourable than the retirement benefits of the Corporation. The Bill seeks to replace the above Ordinance-S.O.R. Gaz. of Ind., 31-3-77, Pt.11 S. 2. Ext., p. 58. Act 53 of 1982.-- According to section 12Aof the Food Corporations Act, 1964, employees of the Central Government whose services were transferred to the Food Corporation of India are entitled to a second opportunity of making representation in disciplinary proceedings where it is proposed to impose on the employees concerned the penalty of dismissal, removal or reduction in bank. This is in accordance with the constitutional provision which applied to Government servants at the time of their transfer. Subsequently by the Constitution (Forty-second Amendment) Act, 1976clause (2) of article 311 of the Constitution has been amended doing away with the second opportunity. The relevant service rules governing the Government servants have already been amended to be in conformity with the Constitutional amendments. 2. With the amendment of the Constitution, there is now no justification for continuing to allow the transferred employees of the Food Corporation of India the opportunity of being heard twice when that is no longer available even to Government servants. The rationale for giving the benefits that they would have been entitled to this opportunity had they continued to remain in Government service, has disappeared. In view of this and in order to bring the provisions of section 12Aof the Food corporations Act in conformity with the present constitutional position it is proposed to amend sub-section (5) of section 12Aof the Food Corporations Act, 1964 so as to do away with the requirement of giving second opportunity of making representation with regard to the penalty proposed to be imposed. 3. It is proposed to avail of the present opportunity to amend sub-section (3) of section 44of the Act relating to laying of the rules made by the Central Government under section 44before each House of, the Parliament, so as to bring if in line with the Standard Model clause recommended by the Committee on Subordinate Legislation 4.,. It is also .proposed to amend section 45of the Act relating to power to make regulations so as to enable retrospective effect being given to the regulations. The practice has been to make the same terms and conditions, pay scales, etc., which are applicable to employees of the- Government generally applicable to the employees of the Food Corporation. For the .purpose of extending the benefit of any revision in the pay scales or in the allowances payable to or the terms and conditions applicable to employees of the Food Corporation from the same date from which those benefits have been given to employees of the Government, it becomes necessary to make the regulations on the subject with retrospective effect. In accordance with the recommendations of the Committee on Subordinate Legislation, provision is being made for laying of regulations before each House of Parliament. It is also proposed to make it clear in the proposed amendment that the power to make regulations with retrospective effect will not be exercised so as to prejudicially affect the interest of any person. 5 It is also proposed to add a newsection 46to provide for validating retrospective effect given to the regulations already framed by the Food Corporation under the regulation making power conferred on it bysection 45of the Food Corporations Act, 1964. 6. The Bill seeks to achieve the above objects. Gaz. of Ind., 30-4-82, Pt.ll S. 2, Ext.p. 3 (No. 21). Act 36 of 1988.---Section 27of the Food Corporations Act, 1964, empowers the Food Corporation of India or a State Food corporation established under the Act to take advances or borrow money from the Central Government or from any scheduled bank or from any other hank or financial institution approved by the Central Government in this behalf against stocks of food grains or other foodstuffs held by it for the purpose of carrying out its functions under the Act. The provisions of the Act do not permit a Food Corporation borrow funds from other sources or to issue and sell bonds or debentures. 2. The Food Corporations do not generate any internal resources. They require funds both for working capital requirements as well as for investment purposes. At present, the funds are being provided by only the Government and the banking section. It is proposed to diversify the sources of financing. 3. It is, therefore proposed to amend section 27of the Food Corporations. Act, 1964 (37 of 1964) to enable a Food Corporation to raise funds, as and when required, for its operational as well as investment requirements by the issue of bonds and debentures and also by borrowings from the Central and State Government institutions or public sector enterprises or bodies or from public or corporate sector, on such terms, and conditions as may be approved by the Central Government. 4. The Bill seeks to achieve the above objective. Gaz. of Ind., 21-4-87., Pt. II S. 2 F.xt., P. 3 (No. 15). Prefatory Note-Statement of Objects and Reasons,-The Food Corporation of India (FCI) was established under the Food Corporations Act, 1964 (37 of 1964). Section 34 of the Food Corporations Act provides for auditing of the Corporation's accounts by qualified auditors appointed annually by the Food Corporation of India from amongst a list of auditors approved by the Central Government on the advice of the Comptroller and Auditor-General of India (CAG). Food Corporation of India is not a public sector enterprise falling within the ambit of the Companies Act, 1956. It is functioning as an implementing arm of the Central Government by procuring food grains at rates fixed by the Center and distributing the same below costs as part of the targeted Public Distribution System. Under these circumstances. Food Corporation of India needs to be treated on a different footing. Besides the audit by chartered accountants, Food Corporations Act also provides for supplementary audit of accounts by the Comptroller and Auditor-General of India. The Comptroller and Auditor-General of India audits Food Corporation of India through his offices, which are situated in the different parts of the country. 2. It is now proposed that the auditing and certification of accounts which was hitherto being done by the chartered accountants along with the supplementary audit by Comptroller and Auditor-General of India may be replaced by Comptroller and Auditor-General of India as the sole auditor of the accounts of the Corporation. This will help the Corporation avoid needless expenditure on audit fees. as also provide a more meaningful audit by Comptroller and Auditor-General of India whose organisation is well aware of the intricacies of Government policies being implemented by the Food Corporation of India. 3. For making the Comptroller and Auditor-General of India the sole auditor of the accounts of the Food Corporation of India, it is necessary to amend Section 34 of the Food Corporation Act, 1964 as per the proposed Bill. 4. The Bill seeks to achieve the above objects.

An Act to provide for the establishment of Food Corporations for the purpose of trading in food grains and other foodstuffs and for matters connected therewith and incidental thereto. Be it enacted by Parliament in the Fifteenth Year of the Republic of India as follows:---

SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT

(1) This Act may be called The Food Corporations Act, 1964).

(2) It extends to the whole of India1[* * * * * *],

(3) It shall come into force on such date2as the Central Government may, by notification in the Official Gazette, appoint.

The Act has been extended, with modifications, to Sikkim and enforced w.e.f. 1-1-94- see Gaz of Ind, 7- 5-93, Pt. II, S. 3 (ii), Ext.. p. '2 (No. 273) and Gaz. of Ind., 17-12-93, Pt. II, S. 3 (ii), Ext., p. 2 (No. 752).

SECTION 02: DEFINITIONS

- In this Act, unless the context otherwise requires,-

(a) "Corporation" means the Food Corporation of India established under section 3

(b) "Food Corporation" means the Food Corporation of India established under section 3-or a State Food Corporation established under section 17-;

3[(bb) "Foodstuffs" includes edible oilseeds and oils;]

(d) "schedule bank" means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934:

(e) "State Food Corporation" means a State Food Corporation established under section 17-;

(f) "year" means the financial year.

SECTION 03: ESTABLISHMENT OF FOOD CORPORATION OF INDIA

(1) With effect from such date⁴as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Central Government shall establish for the purposes of this Act a Corporation known as the Food Corporation of India.

(2) The Corporation shall be body corporate with the name aforesaid. having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may, by that name, sue and be sued.

SECTION 04: OFFICES AND AGENCIES

(1) The head office of the Corporation shall be at Madras or at such other place⁵as the Central Government may, by notification in the Official Gazette, specify.

⁶[(2) The Corporation may establish offices or agencies at other places in or outside India.

Provided that no such office or agency shall be established at any place outside India without the previous approval of the Central Government.]

SECTION 05: CAPITAL OF CORPORATION

(1) The original capital of the Corporation shall be such sum not exceeding one hundred crores of rupees as the Central Government may -fix.

(2) The Central Government may from time to time increase the capital of the Corporation to such extent and in such manner as that Government may determine.

(3) Such capital may be provided by the Central Government from time to time after due appropriation made by Parliament by law for the purpose and subject to such terms and conditions as may be determined by that Government.

SECTION 06: MANAGEMENT

(1) The general superintendence, direction and management of the affairs and business of the Corporation shall vest in a board of directors which may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation under this Act.

(2) The board of directors, in discharging its functions, shall act on business principles having regard to the interests of the producer and consumer and shall be guided by such instructions on questions of policy as may be given to it by the Central Government.

(3) If any doubt arises as to whether a question is or is not a question of policy, the decision of the Central Government thereon shall be final.

SECTION 07: BOARD OF DIRECTORS

(1) The board of directors of the Corporation shall consist of the following, namely:---

(a) a chairman;

(b) three directors to represent respectively the Ministries of the Central Government dealing with-

(i) food,

(ii) finance, and

(iii) co-operation;

(c) the managing director of the Central Warehousing Corporation established under section 3 of the Warehousing Corporations Act, 1962, ex officio;

(d) a managing director;

(e) six other directors.

(2) All the directors of the Corporation other than the director referred to in 'Clause; (i)- of sub-section (1) shall be appointed by the Central Government.

(3) The managing director, shall---

(a) exercise such powers and perform such duties as the board of directors may entrust or delegate to him. and

(b) receive such salary and allowances as the board of directors may, with the approval of the Central Government, fix: Provided that the first managing director shall receive such salary and allowances as the Central Government may fix.

(4) The term of office of, and the manner of filling casual vacancies among, the directors of the Corporation, other than the director referred to in Clause (c) of sub-section (1), and the other terms and conditions of appointment of the directors of the Corporation shall, subject to the provisions of sub-section (3), be such as may be prescribed.

SECTION 08: DISQUALIFICATION FOR OFFICE OF DIRECTOR

- A person shall be disqualified for being appointed as. and for being, a director of the Corporation---

(a) if he is, or at any time has been, adjudicated insolvent or has suspended payment of his debts or has compounded with his creditors; or

(b) if he is of unsound mind and stands so declared by a competent Court; or

(c) if he is or has been convicted of any offence which in the opinion of the Central Government involves moral turpitude; or

(d) if he has been removed or dismissed from the service of the Government or a corporation owned or controlled by the Government; or

(e) except in the case of the Chairman or the managing director, if he is a salaried official of the Food Corporation of India or a State Food Corporation.

SECTION 09: REMOVAL AND RESIGNATION OF DIRECTORS

(1) The Central Government may, at any time, after consultation with the Corporation, remove the managing director from office after giving him a reasonable opportunity of showing cause against the proposed removal.

(2) The board of directors may remove any director from office who---

(a) is or has become subject to any of the disqualification's mentioned insection 8-; or

(b) is absent without leave of the board of directors from more than three consecutive meetings thereof without cause sufficient, in the opinion of the board, to exonerate his absence.

(3) A director of the Corporation may resign his office by giving notice thereof in writing to the Central Government and on such resignation being accepted, he shall be deemed to have vacated his office.

SECTION 10: MEETINGS

(1) The board of directors of the Corporation shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the Corporation under this Act.

(2) The Chairman of the Board or, if for any reason he is unable to attend any meeting, any other director elected by the directors present at the meeting, shall preside at the meeting.

(3) All questions which come up before any meeting of the board shall be decided by a majority of the votes of the directors present and voting, and, in the event of an equality of votes, the Chairman, or in his absence, the person presiding, shall have and exercise a second or casting vote.

SECTION 11: ADVISORY COMMITTEES

(1) The Central Government may. in consultation with the Corporation, by notification in the Official Gazette, constitute one or more Advisory Cqmmi- ttees consisting of such persons and on such terms and conditions as may be prescribed.

(2) It shall be the duty of any such Advisory Committee to advise the Central Government or the Corporation in regard to any matter connected with the purposes of this Act in respect of which its advice is sought by the Central Government, or, as the case may be, by the Corporation.

(3) The expenses in relation to the Advisory Committees shall be met by the Corporation.

SECTION 12: OFFICERS AND OTHER EMPLOYEES OF CORPORATION

(1) The Central Government shall after consultation with the Corporation, appoint a person to be the Secretary of the Corporation.

(2) Subject to such rules as may be made by the Central Government in this behalf, the Corporation may appoint such other officers and employees as it considers necessary for the efficient performance of its Junctions.

(3) The methods of appointment, the conditions of service and the scales of pay of the officers and other employees of the Corporation shall---

(a) as respects the Secretary, be such as may be prescribed;

(b) as respects the other officers and employees, be such as may be determined by regulations made by the Corporation under this Act.

SECTION 12: A SPECIAL PROVISIONS FOR TRANSFER OF GOVERNMENT EMPLOYEES TO THECORPORATION IN CERTAIN CASES

(1) Where the Central Government has ceased or ceases to perform any functions which

under section 13-are functions of the Corporation, it shall be lawful for the Central Government to transfer, by order and with effect from such date or dates (which, may be either retrospective to any date not earlier than the 1st January, 1965, or prospective) as may be specified in the order, to the Corporation any of the officers or employees serving in the Department of the Central Government dealing with food or any of its subordinate or attached offices and engaged in the performance of those functions: Provided that no order under this sub-section shall be made in relation to any officer or employee in such Department or office who has, in respect of the proposal of the Central Government to transfer such officer or employee to the Corporation, intimated within such time as may be specified in this behalf by that Government, his intention of not becoming an employee of the Corporation.

(2) In making an order under sub-section (1), the Central Government shall, as far as may be, take into consideration the functions which the Central Government has ceased or ceases to perform and the areas in which such functions have been or are performed.

(3) An officer or other employee transferred by an order made under sub-section (1) shall, on and from the date of transfer, cease to be an employee of the Central Government and become an employee of the Corporation with such designation as the Corporation may determine and shall,8 [subject to the provisions of sub-sections (4), (4A), (4B), (4C), (5) and (6)], be governed by the regulations made by the Corporation under this Act as respects remuneration and other conditions of service including pension, leave and provident fund, and shall continue to be an officer or employee of the Corporation unless and until his employment is terminated by the Corporation.

(4) Every officer or other employee transferred by an order made under sub-section (1) shall, within six months from the date of transfer, exercise his option in writing to be governed.-

(a) by the scale if any applicable to the post held by him under the Government immediately before the date of transfer or by the scale of pay applicable to the post under the Corporation to which he is transferred,

(b) by the leave, provident fund, retirement or other terminal benefits admissible to employees of the Central Government in accordance with the rules and others of the Central Government as amended from time to time or the leave, provident fund or other terminal benefits admissible to the employees of the Corporation under the regulations made by the Corporation under this Act, and such option once exercised shall be final:

Provided that the option exercised under clause (a) shall be applicable only in respect of the post to which such officer or employee is transferred to the Corporation and on appointment to a higher post under the Corporation, he shall be eligible only for the scale of pay applicable to such higher post. Provided further that if immediately before the date of his transfer any such officer or employee is officiating in a higher post under the Government either in a leave vacancy or in any other vacancy of a specified duration, his pay, on transfer, shall be protected for the unexpired period of such vacancy and thereafter he shall be entitled to the scale of pay applicable to the post under the Government to which he would have reverted or to the scale of pay applicable to the post under the Corporation to which he is transferred, whichever he may opt: Provided also that when an officer or other employee serving in the Department of the Ministry of the Central Government dealing with food or in any of Us attached or subordinate offices is promoted to officiate in a higher post, in the Department or office subsequent to the transfer to the Corporation of any other officer or employee senior to him in that Department or office before such transfer, the officer or other employee who is promoted to officiate in such higher post shall, on transfer to the Corporation, be entitled only to the scale of pay applicable to the post he would have held but for such promotion or the scale of pay applicable to the post under the Corporation to which he is transferred, whichever he may opt.

9[4-A) Notwithstanding anything contained in sub-section (4),---

(a) every officer or other employee in respect of whom an order of transfer under sub- section (1) had been made before the date of commencement ofthe Food Corporations (Amendment) Act, 1977 (hereafter in this section referred to as the appointed day) shall, whether or not he had exercised the option under sub-section (4) before the appointed day, exercise such option within six months from the appointed day; and

(b) every officer or other employee in respect of whom an order of transfer under sub- section (1) may be made after the appointed day shall, within six months from the date of such order, exercise his option under sub -s. (4),

and in each such case such option once exercised shall be final: Provided that where an officer or other employee having-exercised an option under sub- section (4) before the appointed day-

(i) has died or retired before the appointed day, or dies or retires after the appointed day, before exercising the option as required by this sub-section, or

(ii) does not exercise the option as required by this sub-section,

the option already exercised by him shall be deemed to have been validly exercised by him under sub-section (4).

(4-B) Where an officer or other employee

(a) has died or retired, or dies or retires, after an order of transfer under sub-section (1) in respect of such officer or other employee is made but before exercising the option under sub -section (4) or, as the case may be, as required by sub -section (4-A); or

(b) has died or retired, or dies or retires, before an order of transfer under sub-section (1) in respect of such officer or other employee is made.

he shall, notwithstanding anything contained in sub-s. (4) or sub-section (4-A),-

(i) in a case falling under Clause (a), be deemed to have exercised an option under sub- section (4); and

(ii) in a case falling under Clause (b), be deemed to have been transferred under sub-section (1) and exercised an option under sub -section (4), to be governed by the leave, provident fund, retirement or other terminal benefits admissible to the employees of the Central Government in accordance with the rules and orders of the Central Government as amended from time to time:

Provided that nothing in Clause (a) of this sub-section shall apply to an officer or other employee who has, before the appointed day been paid the terminal benefits as admissible to the employees of the Corporation under the regulations made by the Corporation under this Act, unless such officer or other employee refunds in a lump sum within six months from the appointed day the amount of contributions made by the Corporation towards such terminal benefits; Provided further that nothing in Cl. (b) of this sub-section shall apply to an officer or other employee who has intimated, under the proviso to sub-section (1), his intention of not becoming an employee of the Corporation.

(4-C) Where an officer or other employee has exercised an option under sub-section (4), or exercises, or is deemed to have exercised, an option under that sub-section, read with sub- section (4-A) or sub-section (4-B), to be governed by the leave, provident fund, retirement or other terminal benefits admissible to the employees of the Central Government, such benefits shall be calculated on the basis of the pay and allowances drawn by him in the Corporation.]

(5) No officer or other employee transferred by an order made under sub-section (1),---

(a) shall be dismissed or removed by an authority subordinate to that competent to make a similar or equivalent appointment under the Corporation as may be specified in the regulations made by the Corporation under this Act:

10[(b) shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges, Provided that where it is proposed after such inquiry, to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed.]

11[Provided further that this clause shall not apply,---

(i) where an officer or employee is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; or

(ii) where the authority empowered to dismiss or remove an officer or employee or to reduce him in rank is satisfied that for some reason, to be recorded by that authority in writing, it is not reasonably practicable to hold such inquiry, or

(iii) to an officer or employee who, after transfer to the Corporation, is appointed to a higher post under the Corporation in response to an open advertisement and in competition with outsiders.

(6) If, in respect of any such officer or employee as aforesaid, a question arises whether it is reasonably practicable to holds such inquiry as is referred to in sub-section (5), the decision thereon of the authority empowered o dismiss or remove him or to reduce him in rank shall be final.

(7) Nothing contained in sub-section (1) shall apply to the members of the Central Secretariat Service or any other service or to persons on deputation to the Department referred to in that subsection or to any of its attached or subordinate offices from any Ministry of the Central Government or from any State Government or from any organisation.

SECTION 13: FUNCTIONS OF CORPORATION

(1) Subject to the provisions of this Act, it shall be the primary duty of the Corporation to undertake the purchase, storage, movement, transport distribution and sale of food grains and other foodstuffs.

(2) Subject as aforesaid, the Corporation may also, with the previous approval of the Central Government,-

(a) promote by such means as it thinks fit the production of food grains and other foodstuffs;

(b) set up, or assist in the setting up of, rice mills,13flour-mills and other undertakings for the processing of food grains and other foodstuffs, and

(c) discharge such other functions as may be prescribed or as are supplemental, incidental or consequential of any of the functions conferred on it under this Act.

SECTION 14: EXECUTIVE COMMITTEE AND OTHER COMMITTEES

(1) The board of directors of the Corporation any constitute an Executive Committee which shall consist of-

(a) the Chairman of the Board;

(b) the Managing director; and

(2) The Chairman of the Board of Directors shall be the Chairman of the Executive Committee.

(3) Subject to the general control, direction and superintendence of the board of directors, the Executive Committee shall be competent to deal with any matter within the competence of the Corporation.

(4) The board of directors may constitute such other committees, whether consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons as it thinks fit for such purposes as it may decide.

(5) A committee constituted under this section shall meet at such times and places and shall observe such rules of procedure in reward to the transaction of business at its meetings (including the quorum at meetings) as may be provided by regulations made by the Corporation under this Act.

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