Section 5 of The Warehousing Corporations Act, 1962 in hindi
- (1)The shares of the Central Warehousing Corporation shall be guaranteed by the Central Government as to the repayment of the principal and the payment of the annual dividend at such minimum rate as may be fixed by the Central Government, by notification published in the Official Gazette, at the time of the issue of the shares.
- (2)Notwithstanding anything contained in the Acts mentioned in this sub-section, the shares of the Central Warehousing Corporation shall be deemed to be included among the securities enumerated in section 20 of the Indian Trusts Act, 1882 (2 of 1882), and also to be approved securities for the purpose of the Insurance Act, 1938 (4 of 1938) and the Banking Companies Act, 1949 (10 of 1949).
Summary
- The Central Government legally guarantees the safety of money invested in the shares of the Central Warehousing Corporation.
- The government promises to repay the main investment amount (the principal) and a guaranteed minimum annual dividend.
- The minimum dividend rate is fixed and published by the government at the time the shares are first issued.
- These shares are legally treated as highly secure investments, officially recognized as approved securities for trusts, banks, and insurance companies.
Practical examples
FAQ
1. What happens to my investment if the Corporation goes bankrupt?
The Central Government guarantees the repayment of the principal amount, so the approved investors do not lose their initial money.
2. Does the dividend rate change unpredictably every year?
No, the minimum dividend rate is fixed by the Central Government at the very time the shares are issued.
3. Can formal trust funds legally invest in these shares?
Yes, the shares are deemed to be approved securities under the Indian Trusts Act, 1882.
Test yourself
Q1.Under Section 5 of The Warehousing Corporations Act, 1962, what exactly does the Central Government guarantee for the shares of the Corporation?
Q2.Under Section 5 of The Warehousing Corporations Act, 1962, when is the minimum rate of the guaranteed annual dividend fixed?
Q3.A reader might assume Section 5 cross-references Section 20 of this same Act regarding state warehouse management. However, looking closely at the text of Section 5 of The Warehousing Corporations Act, 1962, which "Section 20" is actually cross-referenced to prove the shares are highly secure?
Q4.According to Section 5 of The Warehousing Corporations Act, 1962, the shares are deemed to be approved securities for the purposes of which two specific Acts besides the Indian Trusts Act?