The British India Corporation (Acquisition of Shares) Ordinance, 1981

-ITTffm-fl'T EXTRAORDINARY imr II~ 1 PART II-Section 1 snfucm: ~ ~'IITT'fmr PUBLISHED BY AUTHORITY ~() 16] ,r~ \4;;:r,ri', "!&~·tfo<rT~1 ~;:r 1 1, 1981/'<itff'.5 21 , 1903 No. 16] NEW DELHl,THURSDAY,JUNE 11,1981/JYAISTHA :u, 1903 ~ mrr ~ f~~-:r ~i;:5 ~f~zrr G°1 ;ymft ~:i. hm:fr ~ ~ ~ ~ ~ ~ if ~ 'IT ri , Separate paging is given to this Part in order that it may be filed as a. separate compilation MINISTRY OF LA \V, JUSTICE AND COMPANY AFFAIRS (Legislative Department) New Delhi, the 11th June, 1981/Jyaistha 21, 1903 (Saka) 1J1:J~ J3I{ITISH J.NPJi\ CQEPORATIO.N _(AC.QUI:. • S.ITION OF SHARES) ORDINANCE, 1981 No. 5 OF 1981 ~ .. ., .... Promulgated by the President in the Thirty-second Year of the Republic of India. A.1 Ordinance <to provide for the acquisition of certain shares of the British India Corporation Limited with a view to securing the proper management of the affairs of the Company and the continuity and development of the production of goods which are vital to 1:he needs of the country and for matters connected therewith or incidental thereto. WHEREAS Messrs. British India Corporation Limited, Kanpur, are engaged in the manufacture and production of pure and blended woollen fabrics which arc vital to the needs of the general public; AND WHEREAS as a result of an investigation made under section 15 of the Industries (Development and Regulation) Act, 1951, certain directions were issued to the Company under section 16 of that Act which, inter alia, included the modernisation of the plant and machi­ nery of the undertakings of the Company; Short title and com­ mencement. Definitions. AND WHEREAS for the purpose of carrying out the said directions, public financial institutions had advanced large sums of money to the Company; AND WHEREAS the Central Government and certain public finan­ cial institutions have also invested considerable 1funds in the share capital of the Company; AND WHEREAS the State Bank of ,India has advanced considerable sums to the Company and a part thereof has been guaranteed by the Central Government; AND WHEREAS further investment of large sums of money is necessary for the maintenance and development oif the production of the undertakings of the Company and for securing the proper manage­ ment or£ the affairs of the Company; AND WHEREAS acquisition by the Central Government of an effec­ tive control over the affairs or the Company is necessary to enable it to make the investments aforesaid; AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action; Now, THEREFORE, in exercise of the powers conferred by clause ( 1) of article 123 of the Constitution, the President is pleased to promulgate the following Ordinance:- CHAPTER I PRELIMINARY 1. (1) This Ordinance may be called the British India Corpo­ ration (Acquisition of Shares) Ordinance, 1981. (2) It shall come into force at once. 2. In this Ordinance, unless the context otherwise requires,- ( a) "appointed day" means the date of commencement of this Ordinance; (b) "bank" means a banking company within the meaning of the Banking Regulation Act, 1949; (c) "Commissioner" means the Commissioner of Payments appointed under section 6; (d) "Company" means the British India Corporation Limited, being a company within the meaning of the Companies 10 of 1949. Act, 1956, and having its registered office at Sutherland House, 1 of 1956. Kanpur, in the State of Uttar Pradesh; ( e) ''notification" means a notification published in the Offi­ cial GaZJette; (f) "prescribed" means prescribed by rules made under this Ordinance; (g) "share" means a share, whether ordinary or preference, in the capital of the Company, and includes a share pledged by .,1955. ■1956. ■ rnao. II 1972. ■1956, ■956. ■mm. any shareholder with any bank or other creditor, but does not include any share in the capital of the Company held by- ( i) the Central Government; (ii) a.ny State Government; (iii) the State Bank of India', established under section 3 of the S:ntc Bnn\ of India Act, 1955, 8nd its subsidiary bunks; (iv) the Life Insurance Corporation of Indi,a, established under section 3 of the Life Insurance Corporation Act, 1956; ( v) the Unit Trust of India, established under section 3 of the Unit Trust of India Act, 1963; • ( vi) any corresponding new bank, within the meaning of the Banking Cornp::inies (Acqu isition -and Transfer of Unclertakings ) Act, 1970; (vii ) any corresponding new hank, within the meaning of the Banking Conmnnics (Acquisition and Transfer of Undcrtakiegs) Act, 1980; ( viii) any general insurance comp::my nationalised by the General frrnr::mcc Companies (Natiomlisation) Act, 1972; ( h) ":,h ::ircholdcr" means ,-- (i) a person who, immediately hefore the appointed day, was registered hy the Company as the holder ,of any share and includes his kgal rcprcsenl•ativc; or ( ii) a person who, b~forc the appointed day, had lodged with the Company a pr-:,ncr instrmw::nt of transfer of any share in the form prescribed unr'kr sec1 1on 108 of the Com­ panies Act, 1956, and executed in accordance with the provisions of that section ; or (iii) a person who claims under a proper instrument of transfer of anv r;hare in the form prescribed under scc­ fi.on 108 of the Comp:rnies Act 1956, ancl delivers such instrument to the Commi·ssioner, duly executed, on or before such date as the Central Government may, by notification, specify in this behalf; (i) "specified date" means such d•ate as the Central Gov­ ernment may, for the purp•0se of any provisi,on of this Ordinance, by .notification , specify and different dates may he specified for different provisions of this Ordinance; (j) words and expressions used herein and not defined but defined in the Companies Act, 1956, have the meanings respec­ tively assigned t,o them in that Act, Transfer and vesti,ng of shares of the Company in the Central Government. Management of the company. Payment of amounts. Appointment of Commis­ sioner of Payments. CHAPTER II ACQUISITION OF THE SHARES OF THE COMPANY 3. (J) On the appointed day, all the shares of the Company shall, by virtue of this Ordinance, stand transferred to, and vested in, the Central Government. (2) The Central Government shall be deemed, on and from the appointed day, to have been registered in the Register of members of the Company as the holder of each share which stands transferred to, and vested in, it by virtue of the provisions of sub-section (1). (3) All the shares which have vested in the Central Government under sub-section (1), shall, by force of such vesting, be freed and discharged of all trusts, liabilities, obligations, mortgages, charges, liens ,and other encumbrances affecting them and any attachment, injunction or any decree or order of the court, tribunal or other authority restricting the use of such shares in any manner, shall be deemed to have been withdrawn. ( 4) For the removal of doubts, it is hereby declared that the provisions of sub-sections (1) and (2) shall not be deemed to affeet- (a) any right of the Company subsisting, immediately before the appointed day, against any shareholder to recover from such shareholder any sum of money on the ground that the shareholder has not paid or credited to the Company the whole or any part of the value of the shares held by him, or on any other ground whatsoever; or ( b) any right of the shareh-0ldcr subsist.ing, immediately before the appointed day, against the Company to receive any dividend or other payment due from the Company. 4. For the purpo-se •Of enabling the Company to function as a Government <;ompany, the Central Government may, by notifioation, make such provisions (including changes in the Board of Directoris, and amendments in the memorandum and articles of assodatk:in, of the Company) as it may consider necessmy and the provisions so made shall have effect notwithstanding anything contained in the Companies Act, 1956. 1 of1956, 5. (J) For the tmnsfer to, and vesting in, the Central Govern­ ment, under section 3, of the shares of the Company, there shall be given by the Central Government to the shareholders of the Company, in cash and in the manner specified in section 7, an amount of rupees twenty-two lakhs and sixty thous•and. (2) The amount, referred to in sub-section (J) , shall carry simple interest at the rate o.f four per cent. per annum for the period com­ mencing on the appointed day and ending on the d::ite on which payment of such amount is made by the Central Government to the Commissioner: 6. (1) The Central Government shall, for the purpose of dis­ bursing the amounts payable to shareholders of the Company under section 5, by notification, appoint a Commissioner of Payments. (2) The Central Gover'nment may appoint such other persons as it may think fit to assist the Commissioner and thereupon the Com­ missioner may authorise one or more of such persons also to exercise all or any of the powers exercisable by him under this Ordinance, and different persons may be authorised to exercise /li!forcnt powers. (3) Any person authorised by the Commissioner to exercise any of the powers exercisable by the Commissioner may exercise those powers in the saJ.ne mannu and with the same effect .as if they have been conferred on that person directly by this Ordinance, and not by way of authorisation. ( 4) The salaries and allowances of the Commissioner and other persons appointed under this section shall be defrayed out of the Consolidated Fund of India. 7. (1) The Central Government shall, within thirty days from the specified date, pay, in cash, to the Commissioner, for payment to the shareholders of the Company,- (a) an amount equal to the amount specified in sub­ section ( 1) of section 5; and ( b) an amount equal to the amount determined under sub-section (2) of section 5. (2) A deposit account shall be opened by the Central Govern­ ment in favour of the Commissioner, in 1he Public Account of India, and every amount paid under this Ordinance to the Commissioner shall be deposited by him to the credit of the said deposit account and the sJid deposit account shall be operated by the Commissioner. ( 3) The interest accruing on the amount standing to the credit of the deposit account, referred to in sub-section, (2), shall enure to the benefit of the shareholders of the Company. 8. (1) Every shareholder, having a claim in relation to any share acquired by this Ordinance, shall prefer such claim before the Commissioner within thirty days from the specified date: Provided that if the Commissioner is satisfied that the claimant was pre•,1ented by sufficient cause from preferring the claim within the period of thirty days, he may entertain the claim within .a further period of thirty days and not thereafter. (2) Every shareholder of a preference • fc.rential claim with regard to the amount Government to the Commissioner. share shall have a pre­ paid by the Central 9. On receipt of the claims made under section 8, the Commis­ sioner ~hall separatciy arrange the claims in relation to preference shares and in relation to the ordinary shares and examine the claims in relation to each such share. 10. (I) After examining the claims, the Commissioner shall fix a certain date on or before which every claimant shall file the proof of his claim or be excluded from the benefit of the disburse­ ments made by the Commissioner. (2) Not less than fourteen days' notice of the date so fixed shall be given by advertisement in one issue of the daily newspaper in the English language and in one issue of such daily newspaper in the ,regional language as the Commissioner may consider suitable, and every such 1notice shall call upon the claimant to file the proof of his claim with the Commissioner within the time specified in the advertisement. Payment by the Central Government to the Com_ missioner. Claims to be made to the Commis­ sioner. Examination of claims. Admission or rejection of claims. Disbursement of money by the Commissioner to claimants. Undisbursed or unclaimed amou"1t to be deposited to the general revenue account. (3) Every claimant, who fails to file the proof within the time specified by the Commissioner, shall from the disbursement made by the Commissioner. of his claim be excluded ( 4) The Commissioner shall, after such investigation as may, in his opinion, be necessary, and after giving the Company an opportu­ il1ity of .refuting the claim and after giving the claimant a reasonable ,OJ)portunity of being heard, in writing, admit or reject the claim in whole or in part. (5) The Commissioner shall have the power to regulate his own procedure in all matten arising out of the discharge of his functions, including the place or places rtt which he will hold his sittings. and shall, for the purpose of making an investigation under this Ordi~ nance, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the 5 of 190&fl following matters, namely:- (a) the summoning and enforcing the attendance of any wit1ness and examining him on oath; ( b) the discovery a'nd production of any document or other material object producible as evidence; (c) the reception of •evidence on affidavits; (d) the issuing of any commission for the examination of witnesses. ( 6) Any investigation before the Commissioner shall be deemed! to be a judicial proceeding within the meaniM of sections 193 and 228 of the Indian Penal Code and the Commis;ioner shall be deemed 45 of 186.■ to be a civil court for the purposes of section 345 and Chapter XXVI of the Code of Criminal Procedure, 1973. 2 of 1974. (7) A claimant, who is dissatisfied with the decision of the Commissioner, may prefer an appeal against the decision to the principal civil court of original jurisdiction within the local limits of whose jurisdiction the registered office of the Company is situated. 11. (1) After admitting a claim under this Ordinance, the amount due in respect of each share acquired by virtue of this Or­ dinance shall be paid by the Commissioner at the rate o'f rupees ten per prnfcrcncc share, and at the rate of fifty paisc per ordinary share to the person or persons to whom such sums are due, and on such payment, the liability of the Central • Government in respect of the share so acquired shaH stand discharged. (2) The Commissioner shall also apportion nmongst the share­ holders, the amount paid to him by way of interest under sub-section (3) of section 7, a'.nd such apportionment shall be made on the basis of the amount due to each sb::ircho1clcr. 12. Any money paid to the Commissioner which remains undis­ bursed or unclaimed on the date immediately preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by the Commissioner before his office is finally wound up to the general revenue account of the Central Government; but a ,claim to any money so transferred may be preferred to the Central Government by the person cntitlcd to such payment and shall be dealt with as if such transfer had not been made, the order, if any, ifor payment of the claim being treated as an order for the refund of revenue, 13. For the purposes of ascertammg whether any person claim­ ing payment under this Ordinance is a shareholder, the Commissioner, shall have the right to- ( a) require any person, having the possessfon, custody or control, of any register or record of the Company, to produce such register or record before the Commissioner, (b) require any pers,on to make any statement or furnish ,any information which may be required by the Oomrissioner. 14. Where there is any dispute as to the person or persons who are entitled to any amount payable under this Ordiruance (including any dispute as to who are the legal representatives of any deceased claimant to the amount), the Commissioner may, ,after making such inquiry as he may deem fit, make the payment to such person as appears to him to be best entitled to receive the amount: Provided that if the Commissioner is unable to determine as to who is the person entitled to the amount and considers that the matter could more appropriately be dealt with by the principal civil court of ,original jurisdiction within the local limits of whose jurisdiction the registered office of the Company is situated, he may refer such dispute to the said court, whose decision thereon shall be final: Provided further that nothing contained herein shall ,affect the liability of any person, who may receive the whole or any part of the amount allowed under this Ordinance, to pay the same to the person lawfully entitled thereto. 15. Where any dispute has been referred under section 14 by the Commissioner to the civil court referred to therein, he sfyall deposit the amount in that court. CHAPTER III MISCELLANEOUS 16. The provisions of this Ordinance shall have effect notwith­ standing anything inconsistent therewith contained in any law, other than this Ordinance, or in any instrument having effect by virtue of any· law, other tfoan this Ordinance. 17. If any person,- ( a) makes any claim for any payment under this Ordinance, knowing or having reason to believe that such claim i,s false or without any basis; or (b) when required under this Ordinance so to do,- ( i) omits or fails to produce any register or record of the Company; or (ii) makes any statement or furnishes any information which is false in any material particular and which rhe knows or believes to be false or does not believe to be true; or ( c) makes any such statement as aforesaid in any book, account, record, ,register, return or other document, he shall be punishable with imprisonment for a term which. may extend to two years, or with fine which may extend to two thousand rupees, or with both. Power of inspection. Power of Commissioner to inquire into disputes as to amount. Deposit of amount in court. Ordinance to have overriding effect. Penalties. Offences by companies. Limitation of cognizance of offences. Power to make rules. 18, (1) Where an offence under this Ordinance has been com­ mitted by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the com­ pany, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: • Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence. (2) Notwithstanding anything contained in sub-section (1), where any offence under this Ordinance has been committed with the con­ sent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer, such director, mana­ ger, secretary or other officer shall be deemed to be guilty of that offence and shall be li•able to be proceeded against and punished accordingly. Explanation.-For the purposes of this section,- ( a) "company" means any body corporate and includes a firm or other association of individuals; and ( b) "director", in relat1on to a firm, means a partner in the firm. 19. No court shall take cognizance of an offence punishable under this Ordinance, except with the previous sanction of the Central Government or of an officer authorised by th.at Government in this behalf. 20. (1) The Central Government may, by notification, make rules to oarry out the provisions of this Ordinance. ( 2) Every rule made by the Central Government under this Ordinance shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before 'the expiry of the session immediately following the session or the successive sessions a£oresaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, 1he rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule. N. SANJIV A REDDY, President. R. V. S. PERI SASTRI, Secy. to the Govt. of India.