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INDIAN IRON AND STEEL COMPANY (ACQUISITION OF SHARES) ACT

Ministry of Law and Justice

Act nº 89 of 1976


  • Chapter I
  • Chapter II
  • Chapter III
  • Act nº 89 of 1976

Preamble

THE INDIAN IRON AND STEEL COMPANY (ACQUISITION OF SHARES) ACT, 1976

[Act, No. 89 of 1976]

[2nd September, 1976]

PREAMBLE

An Act to provide for the acquisition of certain shares of the Indian Iron and Steel Company 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.

WHEREAS the management of the undertaking of the Indian Iron and Steel Company Limited was taken over by the Central Government for a limited period under the Indian Iron and Steel Company (Taking Over of Management) Act, 1972, in order to secure the proper management of such undertaking;

AND WHEREAS the top management of the Company was guilty of mismanagement of the affairs of the Company and restoration, after the expiry of the limited period aforesaid, of the management of the affairs of the Company to such top management would be prejudicial to the interests of the Company and to the public interest;

AND WHEREAS investments of a large amount is necessary for the maintenance and development of the production of the undertakings 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 investment aforesaid;

BE it enacted by Parliament in the Twenty-seventh Year of the Republic of India as follows:--

Chapter I

Section 1. Short title and commencement

(1) The Act may be called the Iron and Steel Company (Acquisition of Shares) Act, 1976.

(2) It shall be deemed to have come into force on the 17th day of July, 1976.

Section 2. Definitions

In this Act, unless the context otherwise requires,--

(a) "appointed day" means the 17th day of July, 1976;

(b) "bank" means a banking company within the meaning of the Banking Regulation Act, 1949;

(c) "company" means the Indian Iron and Steel Company Limited, being a company within the meaning of the Companies Act, 1956 and having its registered office at IISCO House, 50, Chowringhee Road, Calcutta;

(d) "Commissioner" means the Commissioner of Payments appointed under section 5;

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

(f) "prescribed" means prescribed by Rules made under this Act;

(g) "share" means a share, whether equity 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) any State Government;

(ii) the State Bank of India, established under section 3 of the State Bank of India Act, 1955 and its subsidiary banks;

(iii) the Steel Authority of India Limited, a company formed and registered under the Companies Act, 1956, and having its registered office at Hindustan Times House, Kasturba Gandhi Marg, New Delhi;

(iv) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956;

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

(vi) any corresponding new bank within the meaning of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970;

(vii) any general insurance company nationalised by the General Insurance Business (Nationalisation) Act, 1972;

1[(h) "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, 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, and delivers such instrument, duly executed, to the Commissioner2[before the expiry of one hundred and twenty days from the date of commencement of the Indian Iron arid Steel Company (Acquisition of Shares) Amendment Act, 1981.]

(i) "specified date" means such date as the Central Government may, for the purpose of any provision of this Act, by notification, specify.

1. Substituted by Act, 1977 (39 of 1977), Section 2 (13-10-1977).

2. Words substituted and deemed always to have been substituted by Act, 1981 (59 of 1981), Section 2.


Chapter II

Section 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 vested 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, lines and other incumbrances 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 an any other ground whatsoever; or

(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.

Section 4. Payment of amount

(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 6, an amount of rupees seven crores, twenty three lakhs, ninety five thousand and one hundred and thirty seven and fifteen paise.

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

Section 5. Appointment of Commissioner of Payments

(1) The Central Government shall, for the purpose of disbursing the amounts payable to the Company under section 4, 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.

Section 6. Payment by the Central Government to the Commissioners

(1) The Central Government shall, within thirty days from the specified1date, 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 4; and

(b) an amount equal to the amount determined under sub-section (2) of section 4,

(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:

1. 19-11-1976 notified as specified date 4392, dt. 4-11-1976).


Section 7. 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 Commissioner1[before the expiry of one hundred and twenty days from the date of commencement of the Indian Iron and Steel Company (Acquisition of Shares) Amendment Act, 1981].

2[Provided that if the Commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claim before the expiry of the said period of one hundred and twenty days, he may entertain the claim within a further period of one hundred and twenty days and not thereafter.]

3[(l A) Every claim preferred under sub-section (I) as it stood before the commencement of the Indian Iron and Steel Company (Acquisition of Shares) Amendment Act, 1981, after the expiry of the period or date specified therein shall be deemed to have been preferred under the said sub-section as amended by the said Amendment Act and shall be dealt with (even if it had been disallowed before such commencement) as if it had been preferred within time.]

(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.

1. Words substituted and deemed always to have been substituted by Act, 1981 (59 of 1981), S. 3(a)(i); Previously these words have been substituted by Act, 1977 (39 of 1977), S ection 3 (13-10-1977).

2. Proviso substituted and deemed always to have been substituted ibid by Section 3 (a)(ii).

3. Inserted by Act, 1981 (59 of 1981), Section 3.


Section 7A. Power of Commissioner to inquire into disputes as to persons entitled to any amount

1[7A. Power of Commissioner to inquire into disputes as to persons entitled to any 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 court 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.]

1. Inserted by Act 1977 (39 of 1977), Section 4 (13-10-77).


Section 7B. Deposit of amount of Court

1[7B. Deposit of amount of Court

Where any dispute has been referred under section 7A by the Commissioner to the civil court referred to therein, he shall deposit the amount in that court.]

1. Inserted by Act 1977 (39 of 1977), Section 4 (13-10-77).


Section 8. Examination of claims

On receipt of the claims made under section 7, the Commissioner shall separately arrange the claims in relation to preference shares and in relation to the equity shares and examine the claims in relation to each such share.

Section 9. 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 the 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 disbursement 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, 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 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.

(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.

Section 10. 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 thirty-two and paise seventy-five per preference share, and at the rate of rupees four and paise seventy per equity 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 shareholders, the amount paid to him by way of interest under sub-section (3) of section 6, and such apportionment shall be made on the basis of the amount due to each shareholder.