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Short title.
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1. This Act may be cited as the Co-operative Wholesale Establishment Act.
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Constitution and general objects of the Establishment.
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2.
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(1) An institution to be called “The Co-operative Wholesale Establishment” is hereby established.
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(2) The general objects for which the Establishment is constituted are hereby declared to be-
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(a) to procure and supply the requirements of co-operative societies;
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(b) to carry on business as exporters and importers of, and as wholesale and retail dealers in, goods of every description;
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(c) to carry on such other trade or business, including any agricultural or industrial undertaking or the business of banking or shipping, as may be approved by the Minister, with the concurrence of the Minister in charge of the subject of Finance.(Paragraph (d) is omitted by Act No. 2 of 1961.)
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(3) Nothing in subsection (2) shall be deemed to empower the Establishment to carry on the business of banking or of insurance, unless the Establishment is authorized so to do by regulations made under section 40 and except in accordance with and subject to such conditions and restrictions as may be prescribed. ( In this subsection the words “or of insurance” has to be omitted at a statutory reprint, consequent to the amendment made to paragraph (c) of subsection (2) by section 38 of Act No. 2 of 1961.)
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Powers of the Establishment.
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2A. The Establishment shall have the Powers of the power to do anything necessary for, or Establishment. conducive or incidental to, the attainment of its objects, and in particular, but without prejudice to the generality of the power hereinbefore conferred, to invest, or acquire or hold shares or stock in any public company carrying on or engaged in or about to carry on or engage in any business, being a company having objects similar or substantially similar to the objects of the Establishment:
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Provided, however, that no such investment, acquisition or holding shall be made or entered into unless the Establishment acquires thereby a controlling interest in the company.
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Special provisions as to directors of companies referred to in section 2A.
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2B. The directors of every such company referred to in section 2A shall be citizens or Sri Lanka who shall not be Members of Parliament.
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Report of investments,&c, in companies to Parliament.
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2C. The Minister shall report to the Parliament every investment, or acquisition or holding of shares and stock, in any company referred to in section 2A and such investment, acquisition or holding shall be deemed to have been approved unless specifically disapproved by Parliament within two months of the date on which the information was so reported.
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General control of the Establishment.
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3.
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(1) The general supervision, control and administration of the affairs and business of the Establishment shall be vested in the board of directors of the Establishment.
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(2) The board may, with the concurrence of the Minister, delegate any of its powers or duties relating to general supervision and administration to any director or officer of the board. Such director or officer shall exercise such powers or perform such duties subject to the general or special directions of the board.
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The board to be a body corporate.
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4. The board shall be a body corporate with perpetual succession and a common seal and may sue and be sued in its name and style and shall, subject to the provisions of this Act, be capable of acquiring, holding and alienating property, whether movable or immovable.
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4A.
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(1)The seal of the board shall be in the custody of the board.
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(2) The seal of the board may be altered in such manner as may be determined by the board.
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(3) The seal of the board shall not be affixed to any instrument or document except in the presence of two members of the board, one of whom shall be the chairman and the other a member appointed by the board, both of whom shall sign the instrument or document in token of their presence.
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Constitution of the board and appointment of chairman and deputy chairman of the board,
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5.
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(1) The board shall consist of not more than nine and not less than five members appointed by the Minister of whom-
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(a) one shall be appointed in consultation with the Minister in charge of the subject of Finance; and
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(b) one shall he appointed in consultation with the Minister in charge of the subject of Co-operatives.
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(2) The chairman and the deputy chairman of the board shall be appointed by the Minister from among the members of the board.
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Term of office and qualification of members.
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6.
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(1) Every member of the board shall hold office for a period of three years from the date of his appointment unless he is earlier removed from office or vacates his office.
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(2) A person shall not be qualified to be appointed, or to be, a member of the board if he is a Member of Parliament.
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Removal of a member by the Minister.
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7. Any person appointed as a member of the board may be removed from office by the Minister if such person is absent for a period exceeding three consecutive months from the meeting of the board for any cause which does not appear to the Minister to be reasonable, or if the Minister considers that it is expedient to remove such person from office
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Casual vacancies among members.
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8.When a member of the board dies or vacates his office or is removed from office, the Minister may appoint another person to be a member in place of the member who dies or vacates his office or is removed from office, and the person so appointed shall hold office during the unexpired period of the term of office of the last-mentioned member.
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Acting appointments.
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9.Where any member of the board is, through illness or other cause which the Minister considers reasonable, unable to discharge the duties of his office, the Minister may appoint another person to act in place of such member until the resumption of duties by such member.
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Remuneration of members.
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10.Every member of the board shall be remunerated from the funds of the board for work done by him as a member according to such scales as the Minister may determine.
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Appointments to the staff of the board.
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11.Every appointment to the staff of the board shall be made by the board:
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Provided, however, that no appointment of a general manager, deputy manager or chief accountant shall be made, and no person appointed to any such office shall be dismissed, except with the approval in writing of the Minister.
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Protection for employees of the board for acts done in good faith.
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11A.No suit, prosecution or other legal proceeding shall lie against any employee of the board in respect of any act which is done or purported to be done by him in good faith under this Act.
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Transfer to board of stocks, equipment, c, of the Cooperative Wholesale Establishment heretofore maintained by Government.
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12.
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(1) With effect from the appointed date all the stock in trade, equipment and other movable property of every description which immediately prior to the appointed date are held by or on behalf of the Government by the Co-operative Wholesale Establishment heretofore maintained by the Government shall be transferred to, vested in and held by the board.
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(2) The value of all the stock in trade transferred under subsection (1) shall be estimated by the Deputy Secretary to the Treasury ; and an amount equal to one half of such estimated value shall be payable by the board to the Government within thirty years from the appointed date with interest at the rate of one and a half per centum per annum and in such instalments as the Minister of Finance may determine ; and such amount and the interest thereon shall be deemed to be a debt due to the State from the board.
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Certain contracts of Government deemed to be contracts of the board.
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13. Every contract (whether written or oral) between the Government and any other person under which any premises were immediately prior to the appointed date occupied by the Co-operative Wholesale Establishment heretofore maintained by the Government shall, with effect from the appointed date, be deemed to be a contract between the board and such other person ; and all rights of the Government subsisting under any such contract shall, notwithstanding anything to the contrary in any other law, vest in the board with effect from the appointed date.
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PROVISIONS RELATING TO THE FINANCES AND ACCOUNTS OF THE BOARD |
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Advances to the board by Government.
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14.
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(1) As soon as may be after the appointed date, there shall be paid to the board out of the Consolidated Fund-
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(a) a sum of four million rupees for the purposes of defraying the preliminary expenses of the board under this Act and of providing the working capital of the board ; and
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(b) a sum of one million five hundred thousand rupees for the purpose of the construction of buildings for the purposes of the Establishment.
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The aggregate of the sums paid to the board under this subsection shall constitute a loan from the Government to the board and shall be repayable by the board within thirty years with interest at the rate of one and a half per centum per annum and in such instalments as the Minister of Finance may determine.
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(2) There shall, in addition, be paid to the board out of the Consolidated Fund a sum of three million rupees which shall be carried to a General Reserve.
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Power of board to borrow money.
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15. The board may from time to time, with the approval of the Minister, borrow such sums of money as may be required for carrying out the objects of the Establishment, and may secure the repayment of any such sum by the mortgage of any property of the Establishment.
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Receipts and payments.
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16.
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(1) There shall be credited to the funds of the board, in addition to the sums paid under section 14 and the sums borrowed under section 15, all moneys received by the board in the exercise of its powers and functions under this Act and there shall be paid out of such funds all expenses incurred by the board in the exercise and performance of the powers, functions and duties of the board under this Act, and the principal of, and interest on, any loan obtained by the board under this Act.
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(2) Of the amounts standing to the credit of the General Reserve such proportion as may be determined by the Minister with the concurrence of the Minister in charge of the subject of Finance, shall be invested in securities of any description referred to in section 20 of the Trusts Ordinance or in any trade or business which the Establishment may carry on under this Act; and the moneys realized from the sale of any such investment remaining after the making of any payment authorized by subsection (3) of this section shall be reinvested in securities or in any such trade or business.
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(3) The amounts standing to the credit of the General Reserve shall not be expended for any purpose except with the prior approval of the Minister.
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Accounts of the board.
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17.
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(1) The board shall cause its accounts to be kept in such form and in such manner as may be prescribed.
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(2) The books of account of the board shall be kept at the head office of the board.
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Profit and loss account and balance sheet for each year.
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18.The board shall cause its books to be balanced on the thirty-first day of December in each year and shall, as soon as may be thereafter, cause to be prepared a profit and loss account and a balance sheet containing a summary of the assets and liabilities of the board made up to the date aforesaid. The profit and loss account and the balance sheet shall be signed by the officer responsible for the preparation of such account and balance sheet.
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Audit of accounts of the board.
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19.
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(1) The board shall have its accounts audited each year by the Auditor-General. For the purpose of assisting him in the audit of such accounts, the Auditor-General may employ the services of any qualified auditor or auditors who shall act under his direction and control.
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(2) For the purpose of meeting the expenses incurred by him in auditing the accounts of the board, the Auditor- General shall be paid from the funds of the board such remuneration as the Minister may determine with the concurrence of the Minister in charge of the subject of Finance. Any remuneration received from the board by the Auditor-General shall, after deducting any sums paid by him to any qualified auditor employed by him for the purpose of such audit, be credited to the Consolidated Fund.
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(3) For the purposes of this section the expression “qualified auditor” means-
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(a) an individual who, being a member of the Institute of Chartered Accountants of Ceylon, possesses a certificate to practise as an Accountant issued by the Council of that Institute; or
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(b) a firm of Chartered Accountants each of the partners of which, being a member of that Institute, possesses a certificate to practise as an Accountant issued by the Council of that Institute.
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The Auditor-Generals report.
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20.
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(1) The Auditor-General shall examine the accounts of the board, and ascertain the correctness of the balance sheet and furnish a report stating-
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(a) whether he has or has not obtained all the information and explanations required by him; and
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(b) whether the accounts referred to i n the report are properly drawn up so as to exhibit a true and correct view of the board’s affairs.
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(2) The report of the Auditor-General shall be transmitted by him to the board.
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Annual accounts with Auditor-General’s report to be transmitted to Minister.
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21.The board shall, on receipt of the Auditor-General’s report in each year, transmit such report together with the profit and loss account and the balance sheet to which the report relates, to the Minister who shall cause copies thereof to be laid before Parliament.
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Annual accounts, Auditor-General’s report, and report of the board to be laid before meeting of representatives of certain cooperative societies.
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22.The board shall, on receipt of the Auditor-General’s report in each year, transmit a copy of such report and a statement of the accounts to which that report relates and a report, signed by the members of the board, as to the administration and affairs of the board, to the Commissioner of Co-operative Development who shall thereupon cause a meeting of the representatives of the co-operative store societies and of other co-operative societies which transact business with the Establishment to be convened in the prescribed manner and the copy of the Auditor-General’s report, the statement of accounts of the board and the report of the members of the board to be laid before such meeting.
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Receipts on behalf of the board.
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23.A receipt signed by two members of the board or by an officer expressly authorized by the board to give receipts shall be an effectual discharge for moneys paid to the board.
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Application of net annual profits,
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24 The net annual profits of the board shall be applied to the following purposes:-
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(a) firstly, for the payment to the Consolidated Fund of such sum as may be determined annually by the Minister acting with the concurrence of the Minister in charge of the subject of Finance;
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(b) secondly, for such other purposes including the payment of a bonus to the members of the staff of the board as may be determined by the board, with the approval of the Minister; and
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(c) the balance of such annual profit for payment to the General Reserve.
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PROVISIONS RELATING TO DISPUTES |
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Disputes to be referred to arbitration.
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26. Where any dispute arises between-(Section 25 is repealed by Act No. 18 of 1965)
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(a) the board and any co-operative society; or
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(b) the board and any of its employees, whether past or present,
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such dispute shall be referred to arbitration.
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*(Section 25 is repealed by Act No. 18 of 1965.)
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Nomination of arbitrators.
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27.The reference shall be to two arbitrators, one to be Nomination of nominated by each party to the dispute.
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Selection of umpire.
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28.
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(1) Before entering on the arbitration, the arbitrators shall select an umpire.
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(2)Where the arbitrators cannot agree with respect to the selection of an umpire, the Secretary to the Ministry shall select the umpire.
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(3) Upon selection of the umpire, the Secretary to the Ministry shall determine the amount payable to the umpire as remuneration, and each of the parties shall pay such amount to the umpire before he enters on the arbitration as may be deter mined by the Minister.
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Award to be final.
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29. The award of the arbitrators or umpires shall be final and shall not be called in question in any civil court.
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Costs in arbitration proceedings.
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30. The arbitrators or umpire may in the award direct that the whole or any specified part of the costs which were incurred by the party in whose favour the award was made (including any sum paid by that party under section 28) shall be paid to that party by the other party to the dispute.
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Enforcement of award.
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31.
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(1) Where an award is made against the board, the award shall, on application to see District Court, or the Primary Court of Colombo, according as the total amount payable under the award exceeds or does not exceed three hundred rupees, be enforced in the same manner as a decree of that court.
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(2) Where an award is made against any cooperative society or against any employee of the board, whether past or present, the award shall, on application to the District Court or the Primary Court having jurisdiction over the place in which the society carries on business or such employee resides, according as the total amount payable under the award exceeds or does not exceed three hundred rupees, be enforced in the same manner as a decree of that court.
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COMPULSORY ACQUISITION OF LANDS AND BUILDINGS FOR THE BOARD |
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Compulsory acquisition of lands and buildings.
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32.
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(1) Where any land or building is required by the board for any purpose connected with the objects of the Establishment, that purpose shall be deemed to be a public purpose and that land or building may be acquired under the Land Acquisition Act by the Government for the board.
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[10,12 of 1969.]
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[ [10,12 of 1969.]
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(2) Where any land or building has been acquired under the Land Acquisition Act by the Government for the board, the board shall pay to the Government the amount determined under that Act as the compensation payable in respect of that land or building and also the costs incurred by the Government in the acquisition proceedings.
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POWERS OF THE MINISTER TO GIVE DIRECTIONS AND HOLD INQUIRIES |
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Minister’s power to give directions to the board, and the furnishing of information by the board to the Minister.
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33.
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(1) The Minister may give the board such general or special directions relating to the exercise, performance and discharge of its powers, duties and functions as he may consider necessary in the public interest or in order to ensure the financial stability of the Establishment and the efficient performance of the work of the board.
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(2) The board shall furnish the Minister with such information (including returns) relating to the transactions of the board as the Minister may require.
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Power to hold inquiry into the working of the board-
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34.
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(1) The Minister may, whenever he considers it fit to do so, hold an inquiry, or direct some person authorized by him in writing in that behalf to hold an inquiry, into the working and financial position of the board.
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(2) Where an inquiry is held under subsection (1), all members and officers of the board shall furnish such information in regard to the affairs of the board and produce such books, accounts or papers as the Minister or the person authorized by him may require.
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Dissolution of the board.
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35. Where the Minister is not satisfied with the working and the financial position of the board, he may, by Order published in the Gazette-
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(a) dissolve the board with effect from such date as may be specified in the Order, and
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(b) appoint one or more persons to be the liquidator or liquidators of the board.
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Liquidator’s powers.
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36.A liquidator appointed under section 35 shall, subject to the directions of the Minister, have power to-
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(a) decide any questions of priority which arise between the creditors ;
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(b) compromise any claim by or against the board if the sanction of the Minister has been previously obtained;
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(c) take possession of the books, documents and assets of the board ;
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(d) sell the property of the board; and
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(e) arrange for a distribution of the assets of the board in a convenient manner when a scheme of distribution has been approved by the Minister.
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Closure of liquidation.
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37.
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(1) In the liquidation of the board the funds of the board including the General Reserve shall be applied first to the costs of the liquidation and then to the discharge of the liabilities of the board.
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(2) When the liquidation of the board has been closed, a notice of the liquidation shall be published in the Gazette, and no action in respect of any claim against the board shall be maintainable unless it is commenced within two years from the date of the publication of such notice in the Gazette.
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(3) Any surplus remaining after the application of the funds to the purposes specified in subsection (1) and the payment of any claim, for which an action is instituted under subsection (2) shall be credited to the Consolidated Fund.
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PROVISIONS OF CERTAIN WRITTEN LAW INAPPLICABLE |
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Application of the Companies Ordinance.
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38. Nothing in the Companies Ordinance* or any other written law relating to the incorporation or regulation of companies shall apply to or in relation to the board or the Establishment.*(Repealed and replaced by the Companies Act, No. 17 of 1982. )
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Exemption of the board from stamp duty and registration fees.
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39. The board shall be exempt from-
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(a) any stamp duty chargeable under any written law on any instrument executed by, or on behalf of, or in favour of, the board, in cases where but for the exemption granted by this section, the board would be liable to pay the duty chargeable in respect of such instrument, and
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(b) any fee payable under the law for the time being in force relating to the registration of documents.
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REGULATIONS AND INTERPRETATION |
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Regulations.
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40.
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(1) The Minister may make regulations for the purpose of carrying out the provisions and giving effect to the principles of this Act and in respect of all matters stated or required by this Act to be prescribed or in respect of which regulations are authorized or required by this Act to be made.
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(2) No regulation shall have effect until it has been approved by Parliament. Every regulation which is so approved shall be published in the Gazette and shall be as valid and effectual as though it were herein enacted.
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Interpretation.
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41.In this Act, unless the context otherwise requires-
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” appointed date ” means the 1st day of July, 1950 ;
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” board” means the board of directors of the Establishment;
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“Establishment” means the Co-operative Wholesale Establishment established under this Act;
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” prescribed” means prescribed by regulation made under this Act.
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