Warehousing Corporations (Amendment) Act, 2005

Preamble

WAREHOUSING CORPORATIONS (AMENDMENT) ACT, 20051

[No. 45 OF 2005]

                                                                                                                        [September 15, 2005]

An Act further to amend the Warehousing Corporations Act, 1962 Be it enacted by Parliament in the Fifty-sixth Year of the Republic of India as follows:-

Prefatory Note-Statement of Objects and Reasons.-The Warehousing Corporations Act, 1962 provides for the incorporation and regulation of corporations for the purpose of warehousing of agricultural produce and certain other commodities notified by the Central Government and for matters connected therewith. The Central Warehousing Corporation (CWC) established under the said Act is a profit earning Public Sector Enterprise (PSE) under the administrative control of the Department of Food and Public Distribution and a Mini-Ratna PSE as declared by the Department of Public Enterprise (DPE).

2. In the changed scenario of economic liberalisation and the need to compete effectively, it is proposed to rationalise the composition of, and bring professionalism to, the board of directors of the CWC, on the lines of the instructions issued by the DPE in this regard. Further, there is a need to allow Warehousing Corporations to have access to wider sources of capital at better and more competitive terms, with the liberalisation and growth of the economy, particularly in view of the sizeable investments required to create, augment and improve storage infrastructure. The need can be met by modifying the existing provisions relating to sources of borrowed capital in the Act.

3. It is, therefore, proposed to amend the Act, inter alia, to provide for the following:-

(i) rationalisation and professionalisation of the board of the directors of the Central Warehousing Corporation by including three functional directors on the said board;

(ii) empowering Warehousing Corporations to borrow money from the scheduled banks in addition to the existing sources provided for in the Act, for enabling them to have access to wider sources of capital at competitive terms;

(iii) permit salaried officials of the Central Warehousing Corporation to be appointed as directors on its board of directors.

4. The Bill seeks to achieve the above objects.

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1. Received the assent of the President on September 15, 2005 and published in the Gazette of India, Extra., Part II, Section 1, dated 16th September, 2005, pp. 1-2, No. 51

Section 1. Short title and commencement

(1) This Act may be called the Warehousing Corporations (Amendment) Act, 2005.

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

Section 2. Amendment of Section 7

In Section 7 of the Warehousing Corporations Act, 1962 (58 of 1962) (hereinafter referred to as the principal Act),-

(a) in sub-section (1),-

(i) clause (b) shall be omitted;

(ii) after clause (f), the following clause shall be inserted, namely:-

“(ff) three directors to be appointed by the Central Government;”;

(b) in sub-section (4), the words “and a Vice-Chairman” shall be omitted;

(c) after sub-section (4), the following sub-section shall be inserted, namely:-

“(4-A) The directors appointed under clause (ff) of sub-section (1) shall be entitled to receive such salary and allowances as the Central Warehousing Corporation may, with the approval of the Central Government, determine.”.

Section 3. Amendment of Section 8

In Section 8 of the principal Act, in clause (v), for the words “the managing director”, the words, brackets, letters and figures “the directors appointed under clause (ff) of sub-section (1) of Section 7 and the managing director” shall be substituted.

Section 4. Amendment of Section 12

In Section 12 of the principal Act,-

(a) in sub-section (1), in clause (a), the words “and the Vice-Chairman” shall be omitted;

(b) for sub-section (2), the following sub-section shall be substituted, namely:-

“(2) The Chairman of the board of directors shall be the Chairman of the Executive Committee.”.

Section 5. Amendment of Section 27

In Section 27 of the principal Act, in sub-section (2), in clause (iii), for the words “nationalised bank”, the words “scheduled bank” shall be substituted.

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