THE JAYANTI SHIPPING COMPANY ( ACQUISITION OF SHARES ) Act, 1971
[Act, No. 63 of 1971]
[23rd December, 1971]
An Act to provide for the acquisition of the shares of the Jayanti Shipping Company Ltd in order to serve better the shipping needs of the nation and to facilitate the promotion and development in the interest or the general public of National Shipping and For matters connected therewith or incidental thereto.
BE it enacted by the parliament in the Twenty-second year of the Republic of India as follows:--
Section 1. Short title and commencement
(1) This Act may be called the Jayanti Shipping Company ( Acquisition of shares at 1971).
(ii) It shall be deemed to have come into force on the 17th day of October 1971.
Section 2. Definitions
In this Act unless the context otherwise requires --
(a) "appointed day " means the date of commencement of this Act ;
(b) "Company" means the Jayanti Shipping Company Ltd being a company as defined in the companies Act 1956 (1 of 1956) having its registered office at Bombay.
(c) "Shareholder" means a person who immediately before the appointed day was registered as a shareholder in the capital of the company
(d) "Shipping Corporation of India" means the shipping corporation of India Ltd being a Government company as defined in a companies Act 1956 (1 of 1956) having its registered office at Bombay.
(e) Words and Expressions used bur not defined in this Act and defined in the Companies Act, 1956 (1 of 1956) shall have the meanings respectively assigned to them in the Act
Section 3. Vesting of shares of company in Central Government and compensation therefor
(1) On the appointed day,--
(a) All shares in the Capital of the company shall by virtue of this Act be deemed to be transferred to and vested in the Central government free from all trust, Liabilities and encumbrances; and (vesting of shares of the company in the Central Government and the compensation therefore)
(b) As compensation therefore the central Government shall, in accordance to the provision of the section 4 paid to the share holders in the sum of Rs.4 crores and 50 lakhs in the aggregate.
(2) For the removal of doubts it is hereby declare that transferred and vesting of shares effected under clause A of sub-section 1 shall not be deemed to affect any right of the company substituting immediately before the appointed day against any shareholder to recover from him 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 help by him or on any other ground whatsoever.
Section 4. Apportionment and manner of payment of compensation
(1) The amount of compensation payable under clause (b) of sub-section 1 of section 3 to the share holder shall be apportioned among the shareholders according to the number of shares held by such shareholders
(2) The amount of compensation payable to a shareholder in accordance with the provisions of sub-section (1) shall be given to him, at his option.--
(a) in cash (to be paid by cheque drawn on the Reserve Bank of India) in three equal annual instalments, the amount of each instalment carrying interest at the rate of four per cent.per annum from the appointed day, or
(b) in saleable or otherwise transferable promissory notes or stock certificates of the Central Government issued and repayable at par, and maturing at the end of--
(i) ten years from the appointed day and carrying interest from that day at the rate of four and a half per cent.per annum, or
(ii) thirty years from the appointed day and carrying interest from that day at the rate of five and a half per cent.per annum, or
(c) partly in cash (to be paid by cheque drawn on the Reserve Bank of India) and partly in such number of securities, specified in sub-clause (i) or sub-clause (ii), or both, of clause (b), as may be required by the shareholder, or
(d) partly in such number of securities specified in sub-clause (i) of clause (b) and partly in such number of securities specified in sub-clause (ii) of that clause, as may be required by the shareholder.
(3) The first of the three equal annual instalments referred to in clause (a) of sub-section (2) shall be paid, and the securities referred to in clause (b) of that sub-section shall be issued, within sixty days from the date of receipt by the Central Government of the option referred to in that sub-section, or where no such option has been exercised, from the latest date before which such option ought to have been exercised.
(4) The option referred to in sub-section (2) shall be exercised by a shareholder before the expiry of a period of three months from the appointed day (or within such further time, not exceeding three months, as the Central Government may, on the application of the shareholder, allow) and the option so exercised shall be final and shall not be altered or rescinded after it has been exercised.
(5) If a shareholder omits or fails to exercise the option referred to in sub-section (2), within the time specified in sub-section (4), he shall be deemed to have opted for payment in securities specified in sub-clause (i) of clause (b) of sub-section (2).
(6) Notwithstanding anything contained in this section, a shareholder may, before the expiry of three months from the appointed day (or within such further time, not exceeding three months, as the Central Government may, on the application of the shareholder, allow) make an application in writing to the Central Government for--
(a) the full payment of the compensation payable to him, if the compensation payable to him does not exceed rupees two lakhs; or
(b) an interim payment of an amount equal to seventy-five per cent.of the face value of the shares in respect of which compensation is payable to him, or rupees two lakhs, whichever is greater, if the compensation payable to him exceeds rupees two lakhs, indicating in such application whether the payment is desired in cash or in securities specified in sub-section (2), or in both.
(7) The Central Government shall, within sixty days from the receipt of the application referred to in sub-section (6), make the full payment or, as the case may be, the interim payment to the shareholder in accordance with the option indicated in such application.
(8) The interim payment made to a shareholder under sub-section (7) shall be set off against the total amount of compensation payable to him under this Act and the balance of the compensation remaining outstanding after such payment shall be given to the shareholder in accordance with the option exercised, or deemed to have been exercised, under sub-section (4) or sub-section (5), as the case may be:
Provided that where any part of the interim payment is obtained by the shareholder in cash, the payment so obtained shall be set off, in the first instance, against the first instalment of the cash payment referred to in sub-section (2), and in case the payment so obtained exceeds the amount of the first instalment, the excess amount shall be adjusted against the second instalment and the balance of such excess amount, if any, against the third instalment of the cash payment.
(9) If any dispute arises as to the person entitled to receive the compensation payable in respect of any share, the Central Government shall deposit the amount of such compensation in the court for being paid to the person or persons entitled to be paid.
Section 5. Allocation of shares to Shipping Corporation of India and certain other persons
(1) All the shares of the company vested in the Central Government by virtue of this Act, except one hundred thereof, shall immediately after they have so vested, stand transferred to and vested in the Shipping Corporation of India.
(2) The Central Government may by order transfer the remaining shares to such persons as may be specified in the order to enable the company to function as a Government company.
(3) On the transfer of shares to the Shipping Corporation of India under sub-section (1) or to any person under sub-section (2), the company shall forthwith register each transferee as a member of the company.
(4) The amount paid by the Central Government for the acquisition of the shares which stand transferred to and vested in the Shipping Corporation of India under sub-section (1) shall be deemed to be the contribution by the Central Government to the equity capital of that Corporation and that Corporation shall issue (if necessary, after amending its memorandum and articles of association) to the Central Government paid-up shares in its capital for a corresponding amount.
Section 6. Amendment of memorandum and articles of association of company
For the purpose of enabling the company to function as a Government company, the Central Government may, by notification published in the Official Gazette, make such amendments in the memorandum and articles of association of the company as it may consider necessary.
Section 7. Interim management of company
(1) Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or in the memorandum or articles of association of the company, on and from the appointed day and till a new Board of directors of the company is duly constituted, the persons specified in the Schedule shall be the directors of the company and shall constitute the Board of directors of the company.
(2) If any vacancy arises in the Board of directors specified in the Schedule, it shall be filled by the Central Government in such manner as it thinks fit and thereupon the Schedule shall be deemed to be amended accordingly.
(3) No act or proceeding of the Board of directors specified in the Schedule shall be invalid merely by reason of the existence of any vacancy in the membership of the Board.
Section 8. Directors, etc, not entitled to compensation
Notwithstanding anything contained in any law for the time being in force, no director or managerial personnel specified in section 197A of the Companies Act, 1956 (1 of 1956), or other person entitled to manage the whole or a substantial part of the business and affairs of the company under a special agreement or otherwise shall be entitled to any compensation against the company or the Central Government for the loss of office or for the premature termination of any contract of management entered into by him with the company whether such loss or termination was due to the provisions of the Jayanti Shipping Company (Taking Over of Management) Act, 1966 (24 of 1966) or this Act.
Section 9. Contracts in bad faith, etc, may be cancelled or varied
The company may, within three years from the appointed day, make an application to any court having jurisdiction in this behalf for the purpose of cancelling or varying any contract or agreement entered into, at any time before the issue of the notified order under sub-section (1) of section 3 of the Jayanti Shipping company (Taking Over of Management) Act, 1966 (24 of 1966), between the company and any other person and the court may, if satisfied after due inquiry that such contract or agreement had been entered into in bad faith and is detrimental to the interests of the company, make an order cancelling or varying (either unconditionally or subject to such conditions as it may think fit to impose) that contract or agreement, and the contract or agreement shall have effect accordingly.
Section 10. Duty to deliver possession of property of company and documents relating to company
Any person who has in his possession, custody or under his control any property of, or any books, documents or other papers relating to the property and assets of, the company, including any letters, memoranda, notes or other communications between him and the company, shall be liable to account for the said property, books documents and other papers (including such letters, memoranda, notes or other communications) to the company and shall deliver them up to the company or to such other person as may be authorised for the purpose by the company.