The British India Corporation Limited (Acquisition of Shares) Act, 1981
# THE BRITISH INDIA CORPORATION LIMITED (ACQUISITION OF SHARES) ACT, 1981
 _________

 ARRANGEMENT OF SECTIONS
 ___________

CHAPTER I

PRELIMINARY

SECTIONS

1. Short title and commencement.
2. Definitions.

CHAPTER II

ACQUISITION OF THE SHARES OF THE COMPANY

3. Transfer and vesting of shares of the Company in the Central Government.
4. Management of the Company.
5. Payment of amounts.
6. Appointment of Commissioner of Payments.
7. Payment by the Central Government to the Commissioner.
8. Claims to be made to the Commissioner.
9. Examination of claims.
10. Admission or rejection of claims.
11. Disbursement of money by the Commissioner to claimants.
12. Undisbursed or unclaimed amount to be deposited to the general revenue account.
13. Power of inspection.
14. Power of Commissioner to inquire into disputes as to amount.
15. Deposit of amount in court.

CHAPTER III

MISCELLANEOUS

16. Act to have overriding effect.
17. Penalties.
18. Offences by companies.
19. Limitation of cognizance of offences.
20. Power to make rules.
21. Repeal and saving.

1


-----

# THE BRITISH INDIA CORPORATION LIMITED (ACQUISITION OF SHARES) ACT, 1981

 ACT NO. 29 OF 1981

[11th September, 1981.]

# An Act 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 the needs of the country and for matters connected therewith or incidental thereto.

WHERE AS Messrs. British India Corporation Limited, Kanpur, are engaged in the manufacture and

production of pure and blended woollen fabrics which are 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 (65 of 1951), certain directions were issued to the Company under section 16
of that Act which, inter alia, included the modernisation of the plant and machinery of the undertakings
of the Company;

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 financial institutions have also invested

considerable funds in the share capital of the Company;

AND WHERE AS 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 of the production of the undertakings of the Company and for securing the proper
management of the affairs of the Company;

AND WHEREAS acquisition by the Central Government of an effective control over the affairs of the

Company is necessary to enable it to make the investments aforesaid;

BE it enabled by Parliament in the Thirty-second Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

**1. Short title and commencement.—(1) This Act may be called the British India Corporation**

Limited (Acquisition of Shares) Act, 1981.

(2) It shall be deemed to have come into force on the 11th day of June, 1981.

**2. Definitions.—In this Act, unless the context otherwise requires,—**

(a) “appointed day” means the 11th day of June, 1981;

(b) “bank” means a banking company within the meaning of the Banking Regulation

Act, 1949 (10 of 1949);

(c) “Commissioner” means the Commissioner of Payments appointed under section 6;

(d) “Company” means British India Corporation Limited,being a company within the meaning of

the Companies Act, 1956 (1 of 1956), and having its registered office at Sutherland House, Kanpur,
in the State of Uttar Pradesh;

(e) “notification” means a notification published in the Official Gazette;

(f) “share” means a share, whether ordinary or preference, in the capital of the Company, and

includes a share pledged by 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) any State Government;

2


-----

(iii) the State Bank of India, established under section 3 of the State Bank of India Act,1955

(23 of 1955), and its subsidiary banks;

(iv) the Life Insurance Corporation of India, established under section 3 of the Life Insurance

Corporation Act, 1956 (31 of 1956);

(v) the Unit Trust of India, established under section 3 of the Unit Trust of India Act, 1963

(52 of 1963);

(vi) any corresponding new bank, within the meaning of the Banking Companies (Acquisition

and Transfer of Undertakings) Act, 1970 (5 of 1970);

(vii) any corresponding new bank, within the meaning of the Banking Companies

(Acquisition and Transfer of Undertakings) Act,1980 (40 of 1980);

(viii) any general insurance company nationalised by the General Insurance Business

(Nationalisation) Act, 1972 (57 of 1972);

(g) “shareholder” means,—

(i) a person who, immediately before the appointed day, was registered by the Company as

the holder of any share and includes his legal representative; or

(ii) a person who, before the appointed day, had lodged with the Company a proper

instrument of transfer of any share in the form prescribed under section 108 of the Companies
Act, 1956 (1 of 1956), and executed in accordance with the provisions of that section; or

(iii) a person who claims under a proper instrument of transfer of any share in the form

prescribed under section 108 of the Companies Act, 1956 (1 of 1956), and delivers such
instrument to the Commissioner, duly executed, on or before such date as the Central
Government may, by notification, specify in this behalf;

(h) “specified date” means such date as the Central Government may, for the purpose of any

provision of this Act, by notification, specify and different dates may be specified for different
provisions of this Act;

(i) words and expressions used herein and not defined but defined in the Companies Act,1956 (1

of 1956), have the meanings respectively assigned to them in that Act.

CHAPTER II

ACQUISITION OF THE SHARES OF THE COMPANY

**3. Transfer and vesting of shares of the Company in the Central Government.—(1) On the**

appointed day, all the shares of the Company shall, by virtue of this Act, stand transferred to, and vest 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 affect—

(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

3


-----

(b) any right of the shareholder subsisting, immediately before the appointed day, against the

Company to receive any dividend or other payment due from the Company.

**4. Management of the Company.—For the purpose of enabling the Company to function as a**

Government company, the Central Government may, by notification, make such provisions (including
changes in the Board of Directors, and amendments in the memorandum and articles of association, of the
Company) as it may consider necessary and the provisions so made shall have effect notwithstanding
anything contained in the Companies Act, 1956 (1 of 1956).

**5. Payment of amounts.—(1) For the transfer to, and vesting in, the Central Government, 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 thousand.

(2) The amount, referred to in sub-section (1), shall carry simple interest at the rate of four percent.

per annum for the period commencing on the appointed day and ending on the date on which payment of
such amount is made by the Central Government to the Commissioner.

**6. Appointment of Commissioner of Payments.—(1) The Central Government shall, for the**

purpose of disbursing the amounts payable to shareholders of the Company under section 5, by
notification, appoint a Commissioner of Payments.

(2) The Central Government may appoint such other persons as it may think fit to assist the

Commissioner and thereupon the Commissioner may authorise one or more of such persons also to
exercise all or any of the powers exercisable by him under this Act, and different persons may be
authorised to exercise different powers.

(3) Any person authorised by the Commissioner to exercise any of the powers exercisable by the

Commissioner may exercise those powers in the same manner and with the same effect as if they have
been conferred on that person directly by this Act, 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. Payment by the Central Government to the Commissioner.—(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 Government in favour of the Commissioner, in

the Public Account of India, and every amount paid under this Act to the Commissioner shall be
deposited by him to the credit of the said deposit account and the said 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. Claims to be made to the Commissioner.—(1) Every shareholder, having a claim in relation to**

any share acquired by this Act, 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 prevented by sufficient cause

from preferring theclaim 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 share shall have a preferential claim with regard to the amount

paid by the Central Government to the Commissioner.

**9. Examination of claims.—On receipt of the claims made under section 8, the Commissioner shall**

separately 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.

4


-----

**10. Admission or rejection of claims.—(1) 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 disbursements 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 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 notice shall call upon the claimant
to file the proof of his claim with the Commissioner within the time specified in the advertisement.

(3) Every claimant, who fails to file the proof of his claim within the time specified by the

Commissioner, shall be excluded from the disbursements made by the Commissioner.

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary, and after

giving the Company an opportunity of refuting the claim and after giving the claimant a reasonable
opportunity 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 matters arising out of

the discharge of his functions, including the place or places at which he will hold his sittings and shall, for
the purpose of making an investigation under this Act, have the same powers as are vested in a civil court
under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following
matters, namely:—

(a) the summoning and enforcing the attendance of any witness and examining him on oath;

(b) the discovery and 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

meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall be
deemed 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. Disbursement of money by the Commissioner to claimants.—(1) After admitting a claim**

under this Act, the amount due in respect of each share acquired by virtue of this Act shall be paid by the
Commissioner at the rate of rupees ten per preference share, and at the rate of fifty paise 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 shall stand discharged.

(2) The Commissioner shall also apportion amongst the share-holders, the amount paid to him by way

of interest under sub-section (3) of section 7, and such apportionment shall be made on the basis of the
amount due to each shareholder.

**12. Undisbursed or unclaimed amount to be deposited to the general revenue account.—Any**

money paid to the Commissioner which remains undisbursed 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 would 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 entitled to such payment and shall be dealt with as if such transfer had not been made, the order, if
any, for payment of the claim being treated as an order for the refund of revenue.

**13. Power of inspection.—For the purposes of ascertaining whether any person claiming payment**

under this Act is a shareholder, the Commissioner shall have the right to—

(a) require any person, having the possession, custody or control, of any register or record of the

Company, to produce such register or record before the Commissioner,

5


-----

(b) require any person to make any statement or furnish any information which may be required

by the Commissioner.

**14. Power of Commissioner to inquire into disputes as to amount.—Where there is any dispute as**

to the person or persons who are entitled to any amount payable under this Act (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 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 Act, to pay the same to the person lawfully
entitled thereto.

**15. Deposit of amount in court.—Where any dispute has been referred under section 14 by the**

Commissioner to the civil court referred to therein, he shall deposit the amount in that court.

CHAPTER III

MISCELLANEOUS

**16. Act to have overriding effect.—The provisions of this Act shall have effect notwithstanding**

anything inconsistent therewith contained in any law, other than this Act, or in any instrument having
effect by virtue of any law, other than this Act.

**17. Penalties.—If any person,—**

(a) makes any claim for any payment under this Act, knowing or having reason to believe that

such claim is false or without any basis; or

(b) when required under this Act so to do,—

(i) omits or fails to produce any register or record of the Company; or

(ii) makes any statement of furnishes any information which is false in any material particular

and which he 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.

**18. Offences by companies.—(1) Where an offence under this Act has been committed 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 company, 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 Act has been

committed with the consent or connivance of, or is attributable to any neglect on the part of, any director,
manager, secretary or other officer, such director, manager, secretary or other officer shall be deemed to
be guilty of that offence and shall be liable to be proceeded against the punished accordingly.

6


-----

_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 relation to a firm, means a partner in the firm.

**19. Limitation of cognizance of offences.—No court shall take cognizance of an offence punishable**

under this Act, except with the previous sanction of the Central Government or of an officer authorised by
that Government in this behalf.

**20. Power to make rules.—(1) The Central Government may, by notification, make rules to carry**

out the provisions of this Act.

(2) Every rule made by the Central Government under this Act 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 aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have affect only in such modified form or be 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.

**21. Repeal and saving.—(1) The British India Corporation (Acquisition of Shares) Ordinance, 1981**

(5 of 1981), is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed

shall be deemed to have been done or taken under the corresponding provisions of this Act.

7


-----

