The Sholapur Spinning and Weaving Company (Emergency Provisions) Ordinance, 1950

·. ; ' ' •. , ' _. :t 'i( ORDINA CE No.- . ' 1 • of ·--1 g·so•,· .. . -~ • . (Pul)lished in ·tlie Ga~ette of Inclia E~r,ra,ordinary, dated the 9th JanuaT·y, 19501) , An Ordinance to make special provision for the proper maoag~ment and administra­ . tion of the Sholapur Spinning and Weaving Company, Limited. • • HEREAS on acc.~unt of mismanagement and neglect a situation J:,.as a.r1~6:a in the affairs of the Sholapur ,Spinning and Weaving Company, Limited, ,vh1ch bas prejudicially affected the production of an esse·ntiitl con1- moditv and has caused serious 1memployment amongst a certain section of the • community; • • • ' . . ' . . AND WREREA~ an. emergency has arisen which renders it necessary to ~i!I\Jie s1,ecial provisio11 for the proper manttgement ·and • administrati•.>n of the ·~resa1u Company; - / No,v, THEREFORE, in exercise of. the powers. conferred by section 42 of the , .: Gc.,\·ernn1e11 t of India Act, 1935 (26 Geo. 5, c. 2), the Governor.General is .- pl~ased to 1nttke a11d promulgate the follo,ving Ordina11ce:- .. . l,. Short title a.nd comroencement.-(1) Tl1is Ordinance may ,he ·called th~ Sholttpu1· Spi11ning and Weavmg Company ·(Emergency Provisions) Ordina;nee, 195(). • ' ' (2) It shall come into force at once. • · 2. Deftnitions.-In this Ordinance, unless there is·· 1:1ythipg repugnant in the- subject or context, • , • . .. . . (a) ''Company'' means the Sl1olapu1· Sp\11ning a11d ,\i·eaving Com­ - , pa11y, Limited, registered. under the Compa1~ie~ Act an~ having its registered ffi · B b .- • · • • o ce 1n om ay; · , · · · · · • -· · . ·. . • ; ' , . .. . .. • ... • . . . (b) ''Companies Act'' means •th:e Indian Companies Act,· 1~13 (VII of 1918); • • ( c) ••directors'' means the directors· • appdinted: -under. section S; (d) •·notified ·order'' mbans an ·order notified, in the .. official Gaze.tte. • 3. Power of Central Governme~t to appoint dire~tors of the Oompany.-The Central Government may at any ·time, \>y hot~fi.~d .. q1·der, . appoint as many per­ sous as it thinks fit to be dit·ector·s of the _0o~pany fo~· the purpos~ of tal{:llt over_ .its manageme.ri.t. and. :1dmi:ni1tration and m~y appoint one • of such directors tc be the chairman: l : • ' •• ; • , ·; ••• , ••• ; ' ' ' • • '' I '' j. : L • • I • 1• , • , • ' •• f '• • .J • • • • ' ' - ,. • • - • • • • I 7, 4 t ~ nd!~_. :e!:f:n o!, orde~ ap~~. directors. _ . On ''.t~~ i-s~e '. ~! : a ;w ~otitied '. J~: . . . (a) all the directors of the Company holding office as such immedia- ; • ~ ·. te~y ·before the isstte • of the notified order· sliall be· deemed· to have·. vacated . their offices ;· • • • .•. ,_. : 1>·: • ' ·.,. • • ~ • • , . .. (b) as.,y contract of management between the Company1 ari<l any·man·a.ging >J . agenli thereof holding· office ·as such immediately· before the ·is•ue. of -the ·~ notified order shall be deemed to ·have terminated; • ·' • • ... • :·. • ( o ). the directors . shall take such_ steps as may be· _necessa~y • td ··:take into their custody 01· under their control all the 'property, • effects and actionable claims to "'hich the Compar1y is or apvears to be ~ntitled • and 'lll the ·property and effect.,g of the Compuny shall be deemed to he i~ the . ~ustody pf the directo1..1 as fron1 the date of t~e notified orde1· ~ ·, • . .. ·' ., . ··"'1· •• ,. . . I ' . . . • • • , • ., • • • • • • • • 1 • ' • • • • • • - • 2 .. Bholapur Spi1ining and lY ~avinu .. company _ _ { ~merg {Jncy Provi·sions) ~ . • . (d) the directors shall be for all purposes the dh:eotors of' the C?InPany • • J i, .. constituted u11der the Companies Act and shall alone be entitled to e~ei-oise all the owers of the directors of the Company, whether sueb d • pd f m the Companies Act or from the memorandum or powers are en~e . ro . articles of assoc1at1on or otherwise .. · · 0 5 Powers and duties of directors.-(1) .Subject to the control of ~he Central :G • t th directo-rs shall take such steps as mav be ne~essRry for the • overnniefn m' • e tly ma~s:amng· the business of the Company, and, in pa1·ticular purpose o e c1en ~· _ . . , .the directors shall have power-- . (a) to raise funds in such manner and offer su_ch security therefor as .... they think fit; . . . . . . . . (b) to carry out such repairs as ma~ be necessary 1u respect of any . machinery or other property in their oust.o~y; . );; _ (c) to employ such persons as may be. necessary ~o~ enabling t~emJ~ • ~ efficiently discharg~ their duties and define the conditions of se.rvice of such employees. . • . t1, . (2) 11··ne directo1'S m~y, with the_ . previous· san?t1on of the Cen~r:tl Govern- : ment, cancel or va~, either uncond1t1onally or subJec~ to sue~ conditions as they thii,k fit to irrtpose, ~nv coi1t1·ar.t or s-1greement entereo 1n'to h~t-~re~n tl,e Company and any ether person at any ~ime before the iss1.1e of th(;) !l(ltineo ord~r under st~<~l:io:1 3, if the directors nr~ satisfied that such contract or n.gre~ment is detrimer.~&! tc tta interests ·of the Company. 6. Statement of affairs to be made to directors.,-(1) On the issue of a notifiPd order \1ndei• sectio11 3, there shalJ be made out· Rnrl suhmittf,ld to the director;; a statemtnt as to the affairs ·ot the Company, veri~ed PY _affidavit and • , containilig the follo,ving particulars, nam~}Y ,- . . . . · . , .. · !. , : : • (a) the assets of the Company, stating· separ~tely the cash balance in t1nud and .at the bank, if any; ' . J : ··: (b) the debts and- liabilities; • • . ~ · · · :· • • ., , · _ · · • •• •.: • • (c) • the. names, . residences and occup~tions of the- _oredito!'s, stating L • ..:. s~parately the amount of secu1·ed debts a.nd unsecured debts a11d in the ..... •• c:is-e of S€t~1Ji-ed del?ts, thP. partiv~~rs ~£ the_ sec~1·i~ies, their valt1e r·nd · tl1e • • 1 ~lat es when they were given; ~ • • • · · - · · · - · · ;:'., • • • • (d) the dE>btR due to the Cornp11n;v ,nd the iiames, residences and • ooouJ)ations of the persons from. who,r. they are due· and.· the alllounti Iike);y to be re8Jiaed therefrom.. - · · • I ,. "t •• l ,., I ' •• • • • . • , . l • •• (2) The stntemerit sha11 • be submitted and ve1•ifled by o:ri~. or more ·of th~ .d~eotors. holding_ office. as s_uch immediately before the issue . of · the noti6.e41tij-'l orcl~r. u11d~:;sectio11· 8 for by. t.he secretary., manager 01· -othe1·. chief. office1· of the .. Company ·holding <office as such before ·tJie· issue -0£ the notified• order. ·as the · directors may specify, and the statement shall be submitted within _such time ~• may . pe, ~o :SP~cified_.. . .- . ·: . =~ ·'- _. . _ . . . . ; : : (3)· H a'ny ~erson, wi~lit' _any re&sona~le excuse knowingly'. and wilf _ti, , 1nakes defnult 1n compl:v1ng with the requirements of this section, he s -'v.· b~ punisl1able ~ with impri~~nment which may extend to three mont~s, or with :fine ~-hich ma:v extend to. five hundred r11pees .. or with both. : · · • • • • , '., -· . ' . . ~ . . . 7 .; _·Po~er· ~f director~ to.· institute _proceedings :~ainst past directors, ··etc., tor dama2es.-(J) The directnrf.: mav. tf thev are satisfied that it is necessarv in t~e public intere.st so to do. institute in the name of the Company suoh prci­ ceed1ngs as they think fit for the recovery of damnges for anv frn\1d misfeasance or other misconduct. in connection with the management ~f thP ~ffairs of the ~ Compa11y, commii,ted liy any person befo1·e the iss'ue of the notified order under 'I,, , • . ... • .. • • r- . ~- ~ \ :· ~, 1950]; . -: ~ • - •·:, , . Bholaf"r Spinni,ig an~. W ~a~ing (1.o·rti,pany - 3 ;; (Emergency Provi'Bions) • • • • . ~) ~~ section 3, or for the recove~y of any property of the Company which has been mis- ttt ;· .&pplied or wrong_ fully retained by any person. _ • _ , l'·h t'i, ..: i. . (2) No director shall be personally liable for any costs • • Ot ·: t· · th d" . or expenses incurred ;_- .ill connec 10n w1 any procee 1ngs instituted by virtue of ·this section. taJ /: s. Pen:a.Ity for '!lithholding d~cuments or property from directors.-If a. ,he ~ !Per~otn fails to d~~ver d to the td1r~ctho~s when reg uired any books of accou!l, lr : .reg1s ers or any o . er ocumen s 1n 1s custody relating to the business of the , _ '. ·Comp~ny, . or retains ~ny property of the Qompa11y, he shall be punishable -with 1mpr1sonment which may extend to six months, or with fine which may as :; · .extend to one thousand rupees, or with both. • ' It ':~. • 9_.. Fi~li:ng up of casu~l vac&ncies among directors.-(1) Casu~l vacancies oc- ~ .: . -curring 1n the body of d11 .. ectors, whethe1 .. caused by death, resignation or other-- \ f. (~~e, shall be filled b~ nomination by the Central Government. _ . ;fr: ~--- (2) -~~ act of the directors shall be called in question on the ground· merely ~~- ., ,of _the existence of any vacancy among the dir~ctors or of any defect in t-he ap• c·. _ .. po1nttnent of any of them. ; :··~ 10 .. No right to compensation for termination of contract of managing agent . i or any other contract.-(1) Notwitbst·ar1ding a11ything contained in any law for ~ . the ti1rie being in force, n<;> managing agent shall be entitled to any compenss- , :tiot1 f 01~ the prematt1re termination under this Ordinance . of any co11tract cf 1 ma11agement entered_ !nto by him with the Company, and no person shall be -entitled to_ compens~t10µ in respect of the cancellation or· variation under this Ordinance of any contract or agreement ~ntered: into . betw~en him. and the ~ompany .. (2) Nothing contained in sub-section (1) shall -affect the right of any • such :managing agent ~r person_ tp r.eco:ver from. the . Compa~y _mon~ys recoverable , 4 -otherwjse than by· way of such compensation. • • • • • • . - . t ' • ~ 11. cancellation_ of .appointm~~t of directors .. ,(l) If at any t_ime ~t appears ·to ·the Ce11tral Government that the purpose of the 01·der appointing the directors bas been fulfilled or tha.t for any other reason it is unnecessary that the order ·should 1·emain . in: force,· it may direct. the directo1·s to call a. meet:pg of the sJ,~reholders of the ·company for ·the ptir.pose of 'hom1nating a new bo1y of ·directo1·s a-11d, 011 the 11or11ination of a ~e,"· body, the C'ent1·a;J Government may,. . bv notified order, cancel the~appointment of directors made under this Ordinance. • • • • • •• ., L ..... ·(8-) On the cancellation of a11y such appointment, the directors shall be divest- "' . : -ed of tl1e management and administration of the Company, A.nd such manage­ ment• ttnd administra.tion shall vest in the new body of directors. ft) - 12. Appl~cation.ot-:the .aomp_ames•\Acti '(1) NotwithSi~'ndi-tlg- 1'n:vth!ng_ con­ •· tained in · the Companies Act 01· 1n the memo1·andum or art1~les of assoc·at1~n of ' {. the Company,- _ . (· (a)- it shall not be ]Awful for th~ shareholda-s of t~e Co~pany or any f other person to nominate or appoint any person to be .':' d1rec.tor_ ?f the f .(,• :..1 Company; • ~ • • t· lc'--'r {b) no resolution passed at any meeting of the_ sh9rehol~ers of t~e • ~- ' • • Company shall be given effect to nnless npproved ·by the Centrn 1 <1-overr•- . . . ( c) no proceedin~ fo_r the win ing llP O ~ . omnf_l~V or, . ~r 8 appointment of a 1·eceive1~ in res1)ect t11e1·eof shall lie 1n any C1ourt ... ttn.ess by l. or with the sanction of the Central Government. if'_._ (.8) Subject to the provisioils conta~ned in sub-section _(1) and t~ t~e other 1-> • • • • • th·s Orclina11ce. and st1b3ect to Sltch except1011s. restr1ct.1ons and prov1s1ons 1n 1 . . b. . ·t·fi d d . • •L;. Lh limitations as the Central Government may, y ·no 1 e or er, spec1.1.:,,, ., • • • • • • ,·· . e . ' • • • ' • •• ~ t . . • ( . ' . ' • ' ' • • ! . .. I I ( - ( t ' ' , . ! • . l ' ' ' ' . ,. • • • •• • • • .. • . • 4 • • • • • • • , ' ~, · • Bhot~ti'I" Spinning and W e~v_ing 0.ompany, {Emergency Provi·Bions) • • • • d, C~panies Act shall continue. to a.pp~y .to the. ~omp~y in the sa.m~ manner a f • it appJieci tllei·eto be±-ore tl1e 1~st1e <)f . tl1e 11ot1fied otder unde1~ section 3_ a ~;: - 13. Effect of Ord~ance o~ other l~ws •. ~he _provisions o~ this Ordinan ) _ shall have effect notw1thsta.nd1ng anyth1~g inconsistent ~herewith contained r· \ awy other law or in any instrument having ~ffect by virtue of any law otb n -~ than this Ordinance. • . 8 l' ·- 14. Directors to be public ~rvants.-E~e~y director· 8:PPointed ~nder sectio • a shall be deenied to be a public servunt w1th1n the m~arung of section ~l of thn. ; Indian Penal Code (Act XLV of 1860)_. • . _ e 15. Delegation' of powers.---The Central Government may, by notified ord direct that all or any of the powers exercisable by it under this Ordinance Ill~, be exarcised by the Gover11:ment of ~ombay and wh~re ~11Y po,vers ai·e. so clel! ~ gated they shall be exercisable subJect to such d1rect1ons as the Cent?~·. Government may issue from . time to time. _ U ~ . 16. Protection o1 action take~ und~r Ord.inan~e.-(1) _No suit, prosecution or othe1· legal proceeding sha!l lie against any ~1rector 1n respect. of anythi which is i11 good faitl1 done 01· 111terid.ed to be done 1n pursuance of this Ordinanc' - . (2) No suit or other legal proceeding shal! lie against the Central Govern .. ment, the ·Gove!'nment of Bombay or any director for any damage ~aused Ol" likely to be caused bJ .. anything which is in good faith done or intended to h& done in pursuance c,f this Ordinance. . . . . • 17. Power to make rules .. -(1) The Central Government may make rules to carry· out the pu1·poses <>f this Ordinance . . (2) 111 1>a1·ti<.~u~a1·, a.nd withou~ prejudice to the generality of the· foregoing power, any •rules made under sub~section (1) may provid•e for- . (a) the manner in which the directors may exercise their powers under· this Ordinance ; • • • • . , ~- • . • ( b) . the •• mann!r • jn ~}µch books. 9£ _ account.. shall be maintained by the directors s.1_1d audited;, . . • . • _ . . • • . . . • • (f) the submission ?f specifie_d or pe~iodical return~ and reports by . . . the du·ectors to an:, specified a ut~ority in connection with the affairs of th& ,. · Com_pany. • . . .. . . . . . . r . : . .. . - ' . ' .. • . ' ' ' ' . ' C.· RAJA GOP ALACHAR!,.- : V . r • . t.· ~-. ,·. .• . • •. , .. • . . j I ' • • o • .. . . , . . • Governor:Gen<Jral. - . . . . • .. - • • • • , • . . . . • .. • • .,. . . ' . - • f ' . .. . . . . . ' ' . . • .. . ··• . . ' t • . • . •• • : .• • , • • • I. .,. • .. ... • • • • • ,:> l • .• • . • • \. , . , • • • . . ' ' . • • • • • . ... ! .. • •· . . ' .. . ' . . . ,. ,·.•.',. ' ,. . • • • • • • • . • ~ ' • • . . , • ' . ' ' ' .. •· , . . . . . , . •.., . r ' . . • • • • ' . . . '~ . r' • • • • . .. • . . J .. ' .. • .. • • • . . . . . . • • • • - . , I . . ' • • ' . :. r •. • • ; • \ • ' .. . . .. . ( ' • • ' I • I . , • • • .. . . . J . • • • ... . . - .. . •. • •· • • • . . ' . . GlP\l~Sl-9781\'1 of -LRw-22-9-50 ,..;. ·2,000... · .. . . • • • • • • , • 1 • • ' , • • I •• , . ' • • . , . , . . ' • • • . . . ' . . . . • ' . . . . • ' .. • ,, . ' ., . • • • . ' ' . • • . . ' . , • . . · .