THE RAILWAY COMPANIES (EMERGENCY PROVISIONS) ACT, 1951
[Act, No. 51 of 1951]
Railway Companies (Emergency Provisions)
[14th September, 1951]
In Act to make provision for the proper management and administration of railway companies in certain special cases.
BE it enacted by Parliament as follows:--
Section 1. Short title, extent and application
(1) This Act may be called the Railway Companies (Emergency Provisions) Act, 1951.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It applies to every railway company in respect of which a notify order has been issued under section 3.
Section 2. Definitions
(1) In this Act, unless the context otherwise requires.--
(a) "Companies Act" means the Indian Companies Act, 1913 (VII of 1913);
(b) "directors" means the directors appointed under section 3;
(c) "notify order" means an order notify in the Official Gazette;
(d) "prescribed" means prescribed by rules made under this Act;
(e) "railway company" means any company registered under the Companies Act or any law repealed thereby for the purpose of making and working or making or working a railway, whether alone or in conjunction with other purposes.
Section 3. Power of Central Government to apply Act to any railway company and to appoint directors there of
(1) Where the Central Government is of opinion that a situation has arisen in the affairs of a railway company which
(a) has prejudicially affected the convenience of persons using the railway administered by the railway company, or
(b) has caused serious dislocation in any trade or industry using the railway, or
(c) has caused serious unemployment amongst a section of the community.
or when, in the opinion of the Central Government, it is necessary the national interest the Central Government may, by notify order, apply the provision this Act to the railway company and appoint as many persons as thinks fit to be directors of the railway company for the purpose of taking over its management and administration.
(2) The power to appoint directors under this section includes this power to appoint any individual, firm or company to be the management of the railway company on such terms and conditions as to the Central Government may seem fit.
Section 4. Effect of notify order appointing directors or managing agents
(1) On the issue of a notify order under section 3.
(a) all persons holding office as directors of the railway company immediately before the issue of the notify order shall be deemed to have vacated their offices as such;
(b) any contract of management between the railway company and any managing agent there of holding office as such immediate before the issue of the notify order shall be deemed to has terminated;
(c) the managing agent, if any appointed under this Act shall be deemed to have been duly appointed in pursuance of the Company Act and the memorandum and articles of association of the railway company, and the provisions of the Companies Act and of the memorandum and articles shall, subject to the other provisions contained in this Act, apply accordingly but no such managing agent shall be removed from office except with the previous consent of the Central Government.
(d) the directors shall take such steps as may be necessary to take in to the I custody or under their control all the property, effect and actionable claims to which the railway company is, or appears to be, entitled, and all the property and effects of the railway company shall be deemed to be in the custody of the directors as from the date of the notify order;
(e) the directors shall be for all purposes the directors of the railway company duly constituted under the Companies Act and shall alone been titled to exercise all the powers of the directors of the railway company, whether such powers are derived from the Companies Act or from the memorandum or articles of association of the railway company or from any other source.
Section 5. Powers and duties of directors
(1) Subject to the control of the Central Government, the directors shall take such steps as may be necessary for the purpose of efficiently managing the business of the railway company and, in particular, the directors shall have powers, notwithstanding any thing contained in the Companies Actor in the memorandum or articles of association of the railway company.--
(a) to chose one of their number to be chairman and to delegate to him or to any one or more of the directors all or any of their powers;
(b) with the previous approval of the Central Government and subject to such conditions as that Government may think fit to impose, to raise funds in such manner and offer such security there for as they think fit;
(c) to carry out such repairs as may be necessary in respect of any machinery, rolling ski, buildings, works or other property in their custody;
(d) to do all acts necessary for making, maintaining, altering or repairing and using the railway of the railway company;
(e) to employ such persons as may be necessary for enabling them to efficiently discharge their duties, and define the conditions of service of such employees.
(2) The directors may, with the previous sanction of the Central Government, cancel or vary, either unconditionally or subject to such conditions as they think fit to impose, any contract or agreement entered into between the railway company and any other person at any time before the issue of the notify order under section 3, if such contract or agreement had been entered into in bad faith and is detrimental to the interests of the railway company.
Section 6. Statement of affairs to be made to directors
(1) On the issue of a notify order under section 3, there shall made out and submitted to the directors a statement as to the affairs of the railway company, verified by affidavit and containing the following particulars, namely:--
(a) the assets of the railway company, stating separately the cash balance in hand and at the bank, if any;
(b) the debts and liabilities;
(c) the names, residences and occupations of the creditors, stating separately the amount of secured debts and unsecured debts and, in the case of secured debts, the particulars of the securities, their value and the dates when they were given;
(d) the debts due to the railway company and the names residences and occupations of the persons from whom they are due and the amount likely to be realised there from;
(e) such other particulars as may be prescribed.
(2) The statement shall be submitted by one or more of the persons who was or were holding office as a director or as directors of the railway company immediately before the issue of the notify order under section 3 or by the secretary, manager or other chief officer of the railway company who was holding office as such before the issue of the notify order as the directors may require in each case, and the statement shall be submitted within such time as may be so required.
(3) If any person, without any reasonable excuse, knowingly and willfully makes default in complying with the requirements of this section, he shall be punishable with imprisonment which may extend to three months, or with fine which may extend to five hundred rupees, or with both.
Section 7. Statements by beneficial owners of shares railway company
Any person who has any interest in any share of the railway company which stands in the name of another person in the register of share holders of the railway company shall, with in such period as may be specified by the Central Government by notify order, make a declaration in such form as may be prescribed (which shall be countersigned by the person in whose name the share is registered) to the railway company declaring his interest in the share, and notwithstanding anything contained in any other law or in any contract to the contrary, a person who fails to make a declaration as aforesaid in respect of any share shall be deemed to have no right or title whatsoever in or to that share;
Provided that nothing in this section shall affect the right of any person who has an interest in any such share to establish in a court his right thereto if the person in whose name the share is registered refuses to sign that declaration as required by this section.
Section 8. Power of directors to institute proceedings against past directors etc., for damages
(1) The directors may, if they are satisfied that it is necessary in the interests of the railway company or in the public interest so to do, institute in the name of the railway company such proceedings as they think fit for the recovery of damages for any fraud misfeasance or other misconduct in connection with the management of the affairs of the railway company committed by any person before the issue of the notify order under section 3 or for the recovery of any property of the railway company which has been misapplied or wrongfully retained by any person.
(2) No director shall be personally liable for any costs or expenses incurred in connection with any proceedings instituted by virtue of this section.
Section 9. Penalties
If any person will fully destroys or fails to deliver to the directors when required any books of account, registers or any other documents in his custody relating to the business of the railway company or retains any property of the railway company, he shall be punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
Section 10. Filling up of vacancies among directors
(1) Casual vacancies occurring in the body of directors, whether caused by death, resignation or otherwise, shall be filling by nomination by the Central Government.
(2) No act of the directors shall be called in question on the ground merely of the existence of any vacancy among the directors or any defect in the appointment of any of them.
Section 11. No right to compensation for termination of contract of managing agent or any other contract
(1) Not with standing any thing contained in the Companies Act or in any other law for the time being in force, no managing agent shall be entitled to any compensation for the premature termination under this Act of any contract of management entered into by him with the railway company, and no person shall be entitled to compensation in respect of the cancellation or variation under this Act of any other contract or agreement.
(2) Nothing contained in sub-section (1) shall affect the right of any such managing agent or person to recover from the railway company moneys recoverable otherwise than by way of such compensation.
Section 12. Cancellation of appointment of directors
(1) I fat any time it appears to the Central Government that the purpose of the notify order appointing the directors has been fulfilled or that for any other reason it is unnecessary that the notify order should remain in force, the Central Government may, by notify order, cancel the appointment of direct or made under this Act.
(2) On the cancellation of any such appointment as is referred to in sub-section (1), the Central Government may---
(a) direct that all the property, effects and actionable claims of the railway company shall revert in the persons in whom they were vested before the issued of the notify order under section 3; or
(b) reconstitute by fresh appointment a new body of persons to take charge of the management and administration of the whole affairs of the railway company, whether as directors or managers or in any other capacity;
Provided that no such direction or fresh appointment shall be made except in pursuance of are solution passed by the share holders of the railway company at a meeting called for the purpose by the directors appointed under section 3.
(3) The Central Government may, at any time before the issue of the notify order under sub-section (1), take such action as may be necessary under clause (b) of sub-section(2)forthe purpose of making any fresh appointments.
Section 13. Application of the companies Act
(1) Not with standing any thing contained in the Companies Act or in the memorandum or articles of association of the railway company, but subject to the other provisions contained in this Act,---
(a) it shall not be lawful for the shareholders of the railway company or any other person to nominate or appoint any person to be a director of the railway company;
(b) no resolution passed at any meeting of the shareholders of the railway company shall be given effect to unless approved by the Central Government:
(c) no proceeding for the winding-up of the railway company or for the appointment of a receiver in respect there of scallion any court, unless by or with the sanction of the Central Government.
(2) Subject to the provisions contained in sub-section (1) and to the other provisions contained in this Act and subject to such exceptions, restrictions and limitations as the Central Government may by notify order specify, the Companies Act shall continue to apply to the railway company in the same manner assist applied there to before the issue of the notify order under section 3.
Section 14. Effect of Act on other laws
The provisions of this Act and of any notified order made there under shall have effect notwithstanding anything inconsistent therewith in any other law for the time being in force or in the memorandum or articles of association of the railway company or in any other instrument having effect by virtue of any law other than this Act, but save as aforesaid the provisions of this Act shall be in addition to, and no tin derogation of, any other law for the time being applicable to the railway company.