THE STATE AGRICULTURAL CREDIT CORPORATIONS ACT, 1968
[Act, No. 60 of 1968]
[29th December, 1968]
An Act to provide for the establishment in the States and Union territories of Agricultural Credit Corporation and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Nineteenth Year of the Republic of India as follows;-
Section 1. Short title and commencement
(1) This Act may be called the State Agricultural Credit Corporations Act, 1968
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States or for different Union territories.
Section 2. Definitions
In this Act, unless the context otherwise requires,-
(a) "agricultural marketing society" means a co-operative society the objects of which include the marketing of agriculture produce;
(b) "agricultural operation" includes animal husbandry, dairy farming, pisciculture and poultry farming.
Explanation;- The expression "pisciculture" includes the development of fisheries, both inland and marine, catching of fish and all activities connected therewith or incidental thereto;
(c) "agricultural processing society" means a co-operative society the objects of which include the processing of agricultural produce;
(d) "agricultural produce" includes the produce of an agricultural operation;
(e) "appropriate Government" means;-
(i) in relation to any Corporation established in a Union territory, the Central Government, and
(ii) in relation to any Corporation established at any other place, the State Government.
(f) "banking company" has the meaning assigned to it in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(g) "Board" means the Board of directors of the Corporation;
(h) "co-operative farming society" means a co-operative society the objects of which include the cultivation of land on a co-operative basis;
(i) "Corporation", in relation to a State or Union territory, means the Agricultural Credit Corporation established under section 3 in that State or Union territory, as the case may be
(j) "director" means member of the Board;
(k) "Food Corporation" means the Food Corporation of India established under the Food Corporations Act, 1964(37 of 1964);
(l) "prescribed" means prescribed by rules made under this Act;
(m) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1984);
(n) "subsidiary bank" has the meaning assigned to it in the State Bank of India (Subsidiary Banks) Act, 1959(38 of 1959);
(o) "Central Co-operative Bank", "Co-operative Society", "Primary Agricultural Credit Society", "Scheduled Bank", "State Bank" and "State Co-operative Bank", have the meanings respectively assigned to them in section 2 of the Reserve Bank of India Act, 1934(2 of 1934).
Section 3. Establishment of State Agricultural Credit Corporation
(1) The appropriate Government may, by notification in the Official Gazette, establish in any State or Union territory an Agricultural Credit Corporation under such name as may be specified in the notification;
Provided that no such Corporation shall be established in any State or Union territory other than the States of Assam, Bihar, Orissa, Rajasthan and West Bengal and the Union territories of Manipur and Tripura, except with the previous approval of the Central Government and no such approval shall be given by the Central Government except after consultation with the Reserve Bank.
(2) The Corporation established under this Act shall be a body corporate by the name specified in the notification referred to in sub-section (1), 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 or be sued.
Section 4. Head office and other offices
(1) The Corporation shall establish head office at such place in the State or Union territory as the appropriate Government may, after consultation with the Reserve Bank, specify;
(2) The Corporation may, after consultation with the appropriate Government, establish offices or agencies at other places in the State or Union territory, as the case may be.
Section 5. Share capital and share holders
(1) The authorised capital of each Corporation shall be such sum as the appropriate Government may initially fix but it shall, in no case, be less than one crore rupees or more than five crores of rupees;
Provided that where the authorised capital initially fixed is less than five crores of rupees, the appropriate Government may, from time to time, increase the authorised capital to such sum not exceeding five crores of rupees.
Provided further that where the appropriate Government is not the Central Government, the initial fixation of the authorised capital and any subsequent increase or reduction thereof, shall be made with the prior approval of the Central Government
(2) The authorised capital of each Corporation shall be divided into such number of shares as the appropriate Government may determine and shall be issued as fully paid-up shares to the parties mentioned in sub-section (3) at such times and in such manner and to such extent as the appropriate Government may determine and each of such shares shall have the same face value.
(3) Out of the capital issued under sub-section (2)--
(a) in the case of a Corporation established in a State, the Central Government shall subscribe for thirty percent of the share capital, and in the case of a Corporation established in a Union territory, the Central Government shall subscribe for fifty percent of the share capital;
(b) the Reserve Bank shall subscribe for twenty per cent of the share capital;
(c) in the case of a Corporation established in a State, the State Government shall subscribe for twenty per cent of the share capital;
(d) the Food Corporation, State Bank, subsidiary banks,1[corresponding new banks], and banking companies may subscribe for, in the aggregate, thirty per cent of the share capital:
Provided that none of the said parties shall subscribe for more than fifteen per cent, of the share capital.
4. The parties referred to in sub-section (3) shall subscribe for the shares before such date as may be specified in this behalf by the Central Government by notification in the Official Gazette.
5. Subject to the provisions of sub-section (3), the Central Government shall determine the number of shares which are to be allotted to the parties referred to in clause (d) of that sub-section;
Provided that if any of the parties referred to in clause (d) of sub-section (3) fails to subscribe, by the date specified by the Central Government under sub-section (4), for any share allotted to it, such share shall be subscribed for by the Central Government, the Reserve Bank and the appropriate Government in such proportions as may be determined by the Central Government;
Provided further that the shares subscribed for by the Central Government, the Reserve Bank and the appropriate Government, in pursuance of the provisions of the foregoing proviso, may be transferred to any party who is eligible under clause (d) of sub-section (3) to subscribe for such shares in the first instance, so, however, that the total number of shares held by any of the parties referred to that clause does not exceed fifteen percent, of the share capital of the Corporation
| 1.Inserted by the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 (5 of 1970) w.e.f. 19-07-1969.|
Section 6. Restrictions on transfer of shares
Save as otherwise provided in the second proviso to sub- section (5) of section 5, the shares of the Corporation shall not be transferable.
Section 7. Management
(1) The general superintendence, direction and management of the affairs and business of the Corporation shall vest in a Board of directors who may be exercised all the powers and discharge all the functions which may be exercised or discharged by the Corporation other than those which are expressly directed or required by this Act to be done by the Corporation in general meeting.
(2) The Board in discharging its functions shall act on business principles, regard being had to public interest.
Section 8. Corporation to be guided by directions of Central Government
In the discharge of its functions, the Corporation shall be guided by such directions in matters of policy involving public interest as the Central Government may, in consultation with the Reserve Bank, give to it in writing and, if any question arises whether a direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final.
Section 9. Constitution of Board
The Board of directors of the Corporation shall consist of the following, namely:-
(a) one director to be nominated by the Central Government who shall be the Chairman of the Board;
(b) two directors nominated by the appropriate Government, one of whom shall be a person who has special knowledge of co- operation and who is not an employee of the Central or State Government or of the Reserve Bank, State Bank, subsidiary bank, banking company, or Food Corporation;
(c) one director to be nominated by the Reserve Bank;
(d) two directors to be elected in such manner as may be prescribed by the parties subscribing for shares in pursuance of the provisions of clause (d0 of sub- section (3), and sub- section (5) of section 5;
(e) a managing director, to be appointed by the Central Government and, except in the case of first appointment, after consultation with the Board:
Provided that, in appointing a managing director of a Corporation established in a State, the Central Government may also consult the Government of that State.
Section 10. Managing director
(1). The managing director shall-
(a) be a whole - time officer of the Corporation;
(b) perform such duties as the Board may, by regulations or otherwise, assign to him;
(c) hold office for such term, not exceeding three years, as the Central Government may specify at the time of the appointment and be eligible for re- appointment;
(d) receive such salary and allowances and be governed by such terms and conditions of service as the Central Government may-
(i) in the case of first appointment determine, or
(ii) in the case of any subsequent appointment, determine after consultation with the Board.
(2). The Central Government may, after consultation with the Board and for sufficient cause, remove the managing director from office.
Provided that no managing director shall be so removed unless he has been given an opportunity of showing cause against his removal.
(3). If the managing director is by infirmity or otherwise rendered incapable of carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his appointment, the Central Government may, after consultation with the Board, appoint another person to act in his place during his absence.
Section 11. Term of office of directors other than managing director
(1) A nominated director, other than the managing director, shall hold office during the pleasure of the authority nominating him and the period of such office, unless terminated earlier, shall be two years.
Provided that a nominated director shall be eligible for renomination.
(2) An elected director shall hold office for a period of two years from the date of his election;
Provided that an elected director shall continue in office until the election of his successor.