The Warehousing Corporations Act, 1962

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The Warehousing Corporations Act, 1962, is divided into chapters, including preliminary provisions, the Central Warehousing Corporation, State Warehousing Corporations, and finance, accounts, and audit, with sections outlining the structure, management, and functions of these corporations.

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The page outlines various sections of the Warehousing Corporations Act, 1962, including provisions related to investment, accounts, and audit, as well as miscellaneous matters such as delegation, voting rights, and indemnity of directors, concluding with the power to make rules and regulations.

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Section 1 — Short title, extent and commencement

Section 2 — Definitions

The Warehousing Corporations Act, 1962, provides for the incorporation and regulation of corporations for warehousing agricultural produce and other commodities. The Act extends to the whole of India and comes into force on a date appointed by the Central Government. The Act defines key terms, including 'agricultural produce', 'appropriate Government', and 'co-operative society'.

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Section 2A — Construction of references to any law not in force or any functionary not in existence in any State

Section 3 — The Central Warehousing Corporation

Section 4 — Share capital and shareholders

The Warehousing Corporations Act, 1962, defines various terms, including 'notified commodity', 'prescribed', 'recognised association', and 'Warehousing Corporation', and establishes the Central Warehousing Corporation as a body corporate with perpetual succession and a common seal. The Central Warehousing Corporation is to be established by the Central Government, with its head-office at New Delhi or such other place as specified, and has a share capital of twenty crores of rupees divided into two hundred thousand shares. The Central Government may increase the authorised share capital of the Central Warehousing Corporation from time to time, by order notified in the Official Gazette.

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Section 5 — Shares to be guaranteed by Central Government and to be trusted or approved securities

Section 6 — Management of Central Warehousing Corporation

Section 7 — Directors

The Central Government shall subscribe for forty per cent. of the share capital of the Central Warehousing Corporation, with the remaining sixty per cent. to be subscribed by specified institutions, and the shares shall be guaranteed by the Central Government as to repayment of principal and payment of annual dividend, and shall be managed by a board of directors consisting of six nominated directors, among others. The shares of the Central Warehousing Corporation shall not be transferable except to specified entities, and shall be deemed to be trusted or approved securities under various Acts. The board of directors shall exercise all powers and discharge all functions of the Corporation, acting on business principles and guided by instructions from the Central Government on questions of policy.

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The Central Warehousing Corporation's board of directors consists of various nominated and elected members, including one director from the State Bank, and others from scheduled banks, co-operative societies, insurance companies, and financial institutions, with the Central Government appointing three directors and a managing director, and having the power to nominate directors in certain circumstances, with provisions for election, term of office, and remuneration. The first constitution of the board may have nominated directors, who will be replaced by elected directors, with the elected directors holding office for the remainder of the term. The board will have a Chairman appointed by the Central Government from among the directors. The managing director will exercise powers and perform duties as entrusted by the board or the Corporation, and receive salary and allowances fixed by the Corporation with the Central Government's approval. Directors, except the managing director, will receive remuneration fixed by the Corporation with the Central Government's approval, with official directors only entitled to allowances. The term of office and manner of filling casual vacancies among directors will be as prescribed.

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Section 8 — Disqualification for office of Director of the Central Warehousing Corporation

Section 9 — Removal of directors from office

Section 10 — Appointment of officers, etc., and their conditions of service

Section 11 — Functions of Central Warehousing Corporation

The Central Warehousing Corporation has rules for disqualification and removal of directors, including being of unsound mind, insolvent, or convicted of an offence, and provisions for appointment of officers and employees, with conditions of service determined by regulations, and functions including acquiring and building warehouses, running warehouses for storage, and arranging transport facilities. The Central Government may remove the managing director, and the board of directors may remove any director who is subject to disqualifications or absent without leave. The Central Warehousing Corporation may perform various functions, including acquiring and building godowns and warehouses, running warehouses, and arranging transport facilities, subject to the provisions of the Act.

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Section 12 — Executive Committee

Section 13 — Meetings of the Corporation

The Central Warehousing Corporation has various functions, including acting as an agent for the Government, entering into joint ventures, and establishing subsidiary companies, and it has an Executive Committee and holds meetings, including an annual general meeting, with rules of procedure provided by regulations made under the Act. The expression 'foreign company' is defined as having the meaning assigned to it under clause (23A) of section 2 of the Income-tax Act, 1961. The Executive Committee is competent to deal with any matter within the competence of the Central Warehousing Corporation, subject to the general control of the board of directors.

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Section 14 — Grants and loans by the Central Government

Section 15 — Corporation to maintain two funds

Section 16 — Warehousing Fund

Section 17 — General Fund

The Central Government may provide grants and loans to the Central Warehousing Corporation for the purposes of its two funds, namely the Warehousing Fund and the General Fund, with specified terms and conditions, and the Corporation shall maintain and apply these funds accordingly, with the Warehousing Fund being used for advancing loans and grants for promoting warehousing and storage, and the General Fund being used for meeting administrative expenses. The Warehousing Fund and General Fund have distinct sources of credits, including grants, loans, and other sums, and are applied for different purposes, such as advancing loans and meeting administrative expenses. The Warehousing Fund is applied for purposes including advancing loans to State Governments and State Warehousing Corporations, and meeting expenses for training and publicity, while the General Fund is applied for meeting salary, allowances, and other administrative expenses of the Corporation.

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Section 18 — State Warehousing Corporations

Section 19 — Share capital and shareholders

Section 20 — Management of a State Warehousing Corporation

The State Government may establish a State Warehousing Corporation with the approval of the Central Warehousing Corporation, which shall be a body corporate with perpetual succession and a common seal, and have a share capital not exceeding two crores of rupees, with the Central Warehousing Corporation and State Government having roles in its management and shareholding. The Corporation's management shall vest in a board of directors, consisting of nominated directors from the Central Warehousing Corporation and the State Government, and a managing director, with the Chairman appointed by the State Government with the previous approval of the Central Warehousing Corporation. The Central Government may increase the maximum limit of the authorised capital, and the managing director's appointment requires consultation with the directors and previous approval of the Central Warehousing Corporation.

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Section 21 — Disqualification for office of director of the corporation

Section 22 — Removal of directors from office

The managing director of a State Warehousing Corporation has delegated powers and duties, and receives a salary and allowances as fixed by the State Warehousing Corporation in consultation with the Central Warehousing Corporation and with the approval of the State Government, while the board of directors acts on business principles and follows government instructions, with provisions for disqualification and removal of directors from office. A person can be disqualified from being a director if they are found to be of unsound mind, insolvent, or convicted of an offence involving moral turpitude, among other conditions, and the State Government may remove the managing director from office after giving a reasonable opportunity to show cause. The board of directors may also remove a director who is subject to any disqualifications, and the removal of directors is governed by specific provisions and procedures.

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Section 23 — Appointment of officers, etc., and their conditions of service

Section 24 — Functions of the State Warehousing Corporation

Section 25 — Executive Committee

Section 26 — Submission of programme of activities and financial estimates

The Warehousing Corporations Act, 1962, outlines provisions for the appointment of officers, conditions of service, and functions of State Warehousing Corporations, including acquiring and building warehouses, running warehouses for storage, and arranging transport facilities, as well as financial estimates and submissions. A State Warehousing Corporation may also enter into joint ventures with the Central Warehousing Corporation and carry out other prescribed functions, with an Executive Committee competent to deal with matters within its competence. Every Warehousing Corporation must prepare and submit a statement of programme of activities and financial estimates for approval before the commencement of each year.

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Section 27 — Borrowing powers of Warehousing Corporation

Section 28 — Deposit account

Section 29 — Investment of funds

Section 30 — Disposal of profits

The Warehousing Corporations Act, 1962, outlines the financial provisions and borrowing powers of Warehousing Corporations, including the Central Warehousing Corporation and State Warehousing Corporations, with approvals and guarantees from the Central Government and State Governments, as well as the Reserve Bank and other financial institutions. A Warehousing Corporation may issue and sell bonds and debentures, with a total amount not exceeding ten times the paid-up share capital and reserve fund, and may borrow money from various sources, including the Reserve Bank and scheduled banks. The Act also provides for the deposit of funds, investment of funds, and disposal of profits, including the establishment of a reserve fund, with rules and prescriptions from the appropriate Government.

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Section 31 — Accounts and audit of Warehousing Corporation

A Warehousing Corporation may declare a dividend out of its net annual profits after making provisions for bad debts, depreciation, and other matters, subject to certain conditions, including a limit on the dividend rate for the Central Warehousing Corporation. Every Warehousing Corporation must maintain proper accounts, prepare an annual statement of accounts, and have its accounts audited by a qualified auditor, with the auditor reporting to the shareholders and the appropriate Government as required. The appropriate Government may issue directions to the auditor and the Comptroller and Auditor-General of India may undertake an audit of a Warehousing Corporation at any time if public interest so requires.

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Section 31A — Returns and reports

Section 32 — Vacancies, etc., not to invalidate acts and proceedings of Warehousing Corporations

Section 33 — Delegation

Section 34 — Voting rights of shareholders

Section 35 — Disputes between Central Warehousing Corporation and State Warehousing Corporation

Section 36 — Declaration of fidelity and secrecy

Section 37 — Indemnity of directors

The Warehousing Corporations Act, 1962, outlines provisions for audit, annual accounts, and returns, with the Comptroller and Auditor-General of India having the same rights and authority as in government accounts, and every audit report to be forwarded to the appropriate Government within a month of its being placed before the annual general meeting. The Act also covers miscellaneous provisions, including delegation of powers, voting rights of shareholders, disputes between corporations, declaration of fidelity and secrecy, and indemnity of directors, with every director to be indemnified by the Corporation against all losses and expenses incurred in the discharge of his duties, except those caused by his own wilful act or default. Additionally, the Act states that no act or proceeding of a Warehousing Corporation shall be invalid due to vacancies or defects in its constitution, and provides for the referral of differences between the Central Warehousing Corporation and a State Warehousing Corporation to the Central Government for a final decision.

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Section 39 — Provisions relating to income-tax and super-tax

Section 40 — Winding up of Warehousing Corporations

Section 41 — Power to make rules

The Warehousing Corporations Act, 1962, provides that a Warehousing Corporation is deemed a company for income-tax and super-tax purposes, with certain exceptions, and is subject to specific rules regarding winding up and the power to make rules to carry out the purposes of the Act. Exceptions to income-tax and super-tax liability include sums paid by the Central or State Government under guarantees and interest on debentures or bonds issued from such sums. The appropriate Government has the power to make rules to carry out the purposes of the Act, including rules regarding the functions, nomination, and election of directors, and the authorized capital of a State Warehousing Corporation.

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Section 42 — Power of Warehousing Corporations to make regulations

Section 43 — Repeal and savings

The Central Government has the power to make rules regarding various matters, including the issue of shares and the furnishing of returns and information by Warehousing Corporations, and such rules are subject to modification or annulment by both Houses of Parliament. Warehousing Corporations may make regulations, with the previous sanction of the appropriate Government, to provide for matters necessary or expedient for giving effect to the provisions of the Act, including conditions of service and transfer of shares. The Agricultural Produce (Development and Warehousing) Corporations Act, 1956, shall stand repealed with effect from the date of establishment of the Central Warehousing Corporation under section 3, but certain provisions, such as shares allotted and share certificates issued, shall be deemed to have been made under the new Act.

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The Warehousing Corporations Act, 1962, provides for the transfer of shares, moneys, and securities from the repealed Act to the new Corporation, and deems actions taken under the repealed Act to be done under this Act, with certain exceptions, and also establishes the rights, liabilities, and obligations of the new Corporation. The schedule includes a declaration of fidelity and secrecy for directors, officers, employees, or auditors of the Warehousing Corporation, requiring them to maintain confidentiality and faithfully execute their duties. The declaration of fidelity and secrecy must be signed by the individual and witnessed, with a provision for signature and date.