An Act being one of Central Government was enacted with the name and short title as ‘the British India Corporation Limited (Acquisition of Shares) Act, 1981’ (Act no. 29 of 1981). The purpose and object is to make provisions as to acquiring certain shares of the Kanpur based ‘Messrs. British India Corporation Limited’, in order to secure the proper management of the affairs of the Company and also to ensure the continuity and development of the production of goods being vital to the Country’s need. The concerned company was incorporated as the public limited company in the year 1920. The company was provided with certain directions, in furtherance with the investigations effect within the provisions of the Industries (Development and Regulation) Act, 1951 which were to provide for modernization of the plant and machinery of the Company’s undertakings and sum of huge money were also advanced to the Company. However it was again observed that there was need of certain further huge sums of money for maintenance and development of the Production thereof and as such the Central Government finally decided to acquire the all the private shares of the Company and resultantly the present Act was enacted by the Indian Parliament in the 32nd year of republic of India and on 11th day of September, 1981 the same was assented by the President of India. The provisions of this Act were brought into operation and were given effect on 11th day of June, 1981.
The provisions of the Act were divided into three important chapters, where chapter I is making preliminary provisions under the Act. So far as the provisions of the Act closely resembling the purpose thereof are concerned, the Chapter II contains the same. It is specifically given that, all the shares of the Company are transferred and vested, without any obligations, liabilities, mortgages, etc., in the Central Government by virtue of this Act and after such transfer and vesting is effected, the Register of members of the Company, is required to contain the Central Government as the holder of each such transferred shares. However, such transfer is not for affecting the Company’s rights to recover against the shareholders, if in case the concerned shareholder has failed to pay any value of shares and even the Shareholder’s right to receive any dividend or other payments against the company.
The next provision provides that the company should function as the Government company and for enabling as such the Central Government can make necessary provisions either by amending Memorandum of Association- MOA and Article of Association-AOA or by changing in the Board of Directors of the Company and can also provide for more other provisions, irrespective of what contained in the provisions of the Companies Act, 1956.
For acquiring such shares, the Act raises the responsibility on the Central Government that it should pay an amount in cash of 22.60 lakhs of rupees to the shareholders of the Company, with the annual interest @ 4 % per annum for the period for which the payment is not made to the Commission of payment, from the date of such acquisition. Such commission of payment and its assistants are also appointed by the Central Government for such disbursement of amounts. The manner of making payment is also specified under the Act. It is mandatorily required from the Central Government to pay the required amount within the period of 30 days to the Commissioner and every such claims as to payment are required to made to the Commissioner. The Commissioner is required to examine the claims as to shares and on such examination the claim can be either admitted or rejected. In relation to such authority of the Commissioner to deal with the claims, the Commissioner is having powers including to have his own regulatory procedure and also certain powers of Civil Court mentioned under the Code of Civil Procedure, 1908. Besides all other powers this Commissioner is also vested with the investigation powers under this Act.
Lastly, the third chapter of the Act makes miscellaneous provisions, where at the first instant the Act provides for its overriding effect over the other provisions of any other law though contains contrary to the provisions contained under this Act. Further, under its penal provisions the Act sought to make certain acts as an offence under this Act, including the making of false claims, failure to produce any required registers or records of the Company, making of false statements as to required information and also as to books, accounts, registers, etc. The punishment is provided as imprisonment for the term extending to 2 years or there can be fine extending to 2000 rupees, or there can be both imprisonment and fine. Similarly, the penal provisions against the offence by the Companies under this Act are provided under its subsequent provision. However, for taking cognizance under this Act, the prior sanction from the Central Government or authorised officer is deemed necessary. The Central Government is also empowered to the make rules under this Act. And finally, the Act sought to repeal the British India Corporation (Acquisition of Shares) Ordinance, 1981, however, the effected actions under that Ordinance were protected.
Adv. Faim Khalilkhan Pathan