An Act no. 42 of the year 1978 was enacted with the name and short title as ‘the Bolani Ores Limited (Acquisition of Shares) and Miscellaneous Provisions Act, 1978’. The same was provided with the object and purpose to make provisions as to acquiring in the interest of public, of shares of the Bolani Ores Limited, company for serving better to the needs of the Country and also for facilitating the promotional and development of national steel industry. Earlier, the concerned Company was incorporated as private one in the year 1957 for supplying of ore mainly to the Durgapur Steel Plant. And there were 50.5 % of shares in the share capital of that company were held by the Fully Government owned company being ‘Steel Authority of India Limited and remaining shares were held by Orissa Minerals Developments Company limited. Due to the cumulative losses suffered by that Company in the end part of 1977-1978 of over 270 lakhs rupees, the said Company was in need of urgent funds for carrying on the operations of its undertakings and the Orissa Minerals Development Company denied to contribute any further amount. As such by enacting this Act the shares of the said Company sought to acquire in the interest of public. The Act was enacted by the Parliament of India in the 29th year of republic of India and has received the assent of the President of India on 8th day of December, 1978.
The Act makes preliminary provisions under its first chapter, where short title and commencement of the Act along with the definitions of several important terms used under the Act. And the provisions relating to the main purpose of the Act are contained under second chapter of the Act, where it is made clear that all the shares held by the Orissa Minerals Developments Company limited (said company) in the capital shares of the Bolani Ores Limited (earlier company) should be transferred and vested with the Central Government, without having any trusts, liabilities, obligations, etc. encumbrances affecting them. Also any attachment, injunctions, etc. which are restricting the use of such shares should also be treated as have been withdrawn. Further, it is required from the Central Government to pay to the said Company a cash amount of 49,500 rupees for such acquisition of shares held by that said company in the shares capital of earlier company. The period specified for making such payment is 30 days from the day of such acquisition and in case of failure on the part of the Central Government, the said amount to be paid by it with a simple interest @ 6 % per annum. After acquiring such shares by the Central Government, the same should be vested with the Steel Authority of Indian and the amount paid by the Central Government for previous acquisition, is required to be treated as contribution by it to the equity capital of the Steel Authority of India for which such authority should issue to the Central Government 49 fully paid-up shares of the face value of 1000 rupees each and remaining 500 rupees should be paid by such Authority in cash to the Central Government.
The next chapter being chapter III of the Act makes provisions as to dissolution of the Earlier Company and vesting of undertakings in the Steel Authority of India. It is specifically given that the undertakings of the earlier company should be transferred and vested with the Steel Authority of India and on such vesting the earlier company should stand dissolved.
The Chapter IV of the Act makes provisions as to officers and employees of the earlier company on dissolution. It is given that all such officers or employees should also be transferred to the Steel Authority of India with the same conditions, rights, etc. as they were having while serving in the earlier company in relation to those undertakings. And the Directors of such earlier company, on dissolution, should cease to hold their offices. And the auditors should continue to hold the office. However, the aforesaid directors are not entitled to any compensation for their cessation of holding offices. It is also provided that if any provident fund which was established by the earlier company should be continued to be held in trust. And the gratuity, welfare funds, etc. are required to be vested with the Steel authority of India. The next chapter makes provisions as to finance.
Lastly, chapter VI makes miscellaneous provisions under this Act, where provisions regarding delivery of possession of properties, books, documents, etc. of earlier company to the Steel Authority of India. Also penal provisions and protection provisions regarding the actions of Central Government or the Steel Authority of India, or also any officers taken in good faith, is provided under this Act. Besides all other relevant provisions the Act provides for rule making power of the Central Government.
Adv. Faim Khalilkhan Pathan