Indian Railway History - British Law

Extracts from the "Statute Law Revision - Indian Railways Repeal Proposals", August 2007, published by the Law Commission of the United Kingdom.

The Law Commission published a consultation paper in August 2007, proposing repeal of 38 Acts in the UK statutes relating to the operation of railway companies in British India. The material here is extracted from the Consultation Paper. Web site of the Law Commission

Related pages:
History of railways in India - FAQ Extracts from historical archives

Bombay, Baroda, and Central India Railway Company

Acts covered: Bombay Baroda and Central India The whole Act. Railway Act 1906 (6 Edw.7 c.lix)
Bombay Baroda and Central India The whole Act. Railway Act 1924 (14 & 15 Geo.5 c.vii)
Bombay Baroda and Central India The whole Act. Railway Act 1938 (1 & 2 Geo.6 c.x)
Bombay Baroda and Central India The whole Act. Railway Act 1942 (5 & 6 Geo.6 c.v)

Background

1. The Bombay, Baroda and Central India Railway Company was formed in Britain in 1852. After carrying out a survey of the area in Mumbai (formerly Bombay) and Upper India, the company was incorporated in July 1855. As one of the original guaranteed companies, it received an assurance from the Indian Government of a 5% return on the capital invested, up to 500,000.

2. The company began work on the Surat to Mumbai line in 1855. It was opened in stages. The line reached Vadodara (formerly Baroda) in 1861, then moved on to Ahmedabad by 1863, and finally reached Viramgaon in 1871. The Indian Government purchased the railway lines from the company in 1905, under the terms of the contract of guarantee. After 1905, the railway was owned and managed via a partnership arrangement. The state owned the infrastructure whilst the company was responsible for operational aspects (and continued to own the rolling stock and equipment until the contract was terminated by the state in 1941).[52] The management of the Bombay Baroda and Central India Railway network was merged with the state-owned and managed Saurashtra, Rajasthan and Jaipur Railways in November 1951, and became the Indian Railways western zone.[53]

[52] For further information see Awasthi, A. History and Development of Railways in India (1994) Deep and Deep Publications, New Delhi; Ghosh, S. Railways in India - A Legend (2002) Jogemaya Prokashani, Kolkata; Khosla, G. S. A History of Indian Railways (1988) Ministry of Railways, India.

3. The railway company is no longer registered at Companies House as an active company, nor are there any indications that it remains in existence. The 1942 Act provided that notice of the company's dissolution was to be advertised in the London Gazette, although it seems that this was never carried out.[54] Although there are two sets of records relating to the company at the National Archives,[55] neither file confirms the company's formal dissolution. Notwithstanding this, there is no evidence to suggest that the company still exists.

4. Seven Acts relating to the Bombay Baroda and Central India Railway Company were promoted over the lifetime of the company:

  • Bombay Baroda and Central India Railway Act 1855
  • Bombay Baroda and Central India Railway Act 1859
  • Bombay Baroda and Central India Railway Act 1898
  • Bombay Baroda and Central India Railway Act 1906
  • Bombay Baroda and Central India Railway Act 1924
  • Bombay Baroda and Central India Railway Act 1938
  • Bombay Baroda and Central India Railway Act 1942.

Four of these Acts are proposed for repeal in the following note. The remaining three Acts (of 1855, 1859 and 1898) were repealed in full by the 1906 Act.

[53] In 1946, the Railway Companies (Substitution of Parties in Civil Proceedings) Act 1946 (Act 14 of 1946) was enacted which required the Central Government of India to substitute itself for the Bombay, Baroda and Central India Railway Company in any civil proceedings which were outstanding at the time of the enactment. This was in recognition of previous agreements whereby the Indian government took on the rights and liabilities of a number of railway companies.

[54] There are a number of references to the company in The Times in the period up to 1943, and these indicate that the company was readying itself for dissolution. Notice of the contracts terminating was reported on 11 December 1940, an extra dividend payment was reported on 27 October 1941 for the period until the contracts determined, and on 30 April 1943 it was reported that the company was seeking to pay off its debenture stock in preparation for the repatriation of the railways.

[55] Reference numbers BT41/674/3683 and BT285/59.

Bombay Baroda and Central India Railway Act 1906 (6 Edw.7 c.lix) - Purpose

5. The Bombay Baroda and Central India Railway Company was incorporated in 1855, and began work on construction of the Surat to Bombay (now Mumbai) line in that year.[56]

6. From 1855 to 1886 the railway company entered into a series of four contracts with, first, the East India Company and, later, the Secretary of State in Council of India. These contracts empowered the Secretary of State to exercise an option to purchase "the railways works and premises".[57]

7. By 1906 the railway company had accrued capital exceeding 7.5 million, and had raised additional moneys through loans and debenture bond issues.[58] In May of the preceding year (1905), the Secretary of State had given contractual notice of his intention to purchase the railway undertaking from the company. As a consequence of that notice, the Secretary of State had become liable to pay a sum exceeding 11,685,000 by way of purchase price and, further, to pay the debenture sums when due and indemnify the company against the loans. In December 1905, the Secretary of State and the railway company had agreed the extent of the premises and property which were to be transferred, and that transfer took place (under "the contract of 1905") on 31 December 1905.[59]

[56] See http://www.irfca.org/faq/faq-hist.html [accessed 30 April 2007] for an Indian Railways chronology. The railway company was incorporated by the Bombay Baroda and Central India Railway Act 1855 (18 & 19 Vict. c.cxiii) (later repealed by the 1906 Act: see below).

[57] Preamble to the Bombay Baroda and Central India Railway Act 1906 (6 Edw.7 c.lix) ("the 1906 Act"), being "An Act to provide for matters consequent on the purchase by the Secretary of State in Council of India of the railways and other property of the Bombay Baroda and Central India Railway Company and for other purposes". The short title of the 1906 Act for citation was assigned by section 1. The various contracts (of 1855, 1859, 1871 and 1886) were underpinned by the original Act of 1855 and by two more Acts, of 1859 and 1898.

[58] The 1906 Act, preamble and Sch A (the latter reciting the loans and debenture bonds). The railway company was also entitled to various other moneys - for example, a fund for fire insurance, a provident fund, a fines fund (sourced from fines on employees for "dereliction of duty", and used for charitable donations) and accounts for "undivided surplus profits reserved" and "unclaimed dividend warrants".

[59] The 1906 Act, preamble. The railways and works transferred were those constructed under the contracts of 1855, 1859, 1871 and 1886, together with "all lands provided" under the various contracts (and their appurtenances), including - by name - the Godhra-Baroda Chord (all fixed assets) and the Patri Branch (all rolling stock). Additionally, the railway company owned leasehold premises "at Gloucester House in the city of London", which premises were "thenceforth" to be held unsold by the company in trust for (and to the order of) the Secretary of State.

8. It was no longer appropriate for the Secretary of State to carry out the purchase entirely in accordance with the arrangements envisaged by the earlier contracts. Instead, pursuant to the 1905 contract, he would issue to the railway company 3% India Stock to the value of just over 10 million carrying quarterly interest, representing the greater part of the purchase price. The railway company would then continue to "maintain, manage and work" the railway system on the basis that the Secretary of State would pay to it additional sums half-yearly in London.[60] By mid-1906 the Secretary of State had issued the India Stock, and the registers of old stock and transfers had been closed. It had then become necessary to obtain further statutory authority to regulate the registration and distribution of the new stock, to make proper provision for the property which was not to be sold to the Secretary of State, and for the future working by the railway company of its, and other, railway systems.[61] To this end, the company promoted what was to become the 1906 Act,[62] the purpose of which was (in broad terms):

(a) to incorporate the provisions of the Companies Clauses Consolidation Acts 1845, 1863 and 1869 within the 1906 Act, and formally to repeal the Bombay Baroda and Central India Railway Acts of 1855, 1859 and 1898;[63]

(b) to provide for the formal creation of the capital of the railway company;[64]

(c) to require various funds to be transferred to the Secretary of State or to the railway company, and all contracts between the parties - bar that of 1905 - to be terminated, with savings for the guarantees of debenture bonds and interest (and the indemnification of the company by the Secretary of State);[65]

(d) to provide for the cancellation of the railway company's "old stock" and certificates, and replacement with "fully paid new stock", for the closing of the old stockholders' registers and opening of new ones,[66] and for the protection of trustees who had held old stock as part of their trust funds;[67]

(e) to make provision for the payment of "pensions and benefits" ("by way of compensation for loss of their offices") to various affected railway company employees;[68]

[60] The 1906 Act, preamble. The creation and issue of the India Stock was undertaken in accordance with the East India Loans (Railways) Act 1905. The further sums payable included 3% p.a. interest on the sum of 2 million (which sum appeared to represent the balance of the overall purchase price). The 1905 contract was supplemented by a further contract for the working of the railway, under which the railway company would issue 2 million worth of "new capital stock" to its shareholders (with interest guaranteed by the Secretary of State) which represented their share of the purchase price.

[61] The 1906 Act, preamble. The excepted property (four named funds) was set out in Sch B to the Act.

[62] The costs of obtaining the 1906 Act (and ancillary expenses) were to be borne by the railway company from its "working expenses" in 1905 and 1906: ibid., s 51.

[63] The 1906 Act, ss 4, 5 and Sch E. The three Acts specified in Schedule E (those of 1855, 1859 and 1898) were all repealed retrospectively "as from the appointed date", ie from midnight on 31 December 1905 (see the 1906 Act, ss 2, 5), although there was a specific saving in respect of the name, composition and functioning of the Bombay Baroda and Central India Railway Company. The 1906 Act received royal assent in July 1906.

[64] The 1906 Act, s 6. The capital stock was "in the first instance" 2 million, and was deemed to be created on such date as was agreed between the Secretary of State and the railway company.

[65] The 1906 Act, ss 7-11. The fire insurance, provident and fines funds were to be transferred (and liability would pass) to the Secretary of State as from "the appointed date" (see above); and the Secretary of State was to take over liability for payment of interest and eventual repayment of principal on the debenture bonds. The Secretary of State was to indemnify the railway company against the various loans recited in schedule A to the 1906 Act (ibid., s 11), and the company was to take receipt of the property described in paragraph 1 of schedule B (ibid., s 8).

[66] The 1906 Act, ss 12-15. The stock transfer was to be carried out in accordance with a financial formula in the statute. Any new stock which was not allocated by transfer, or which went unclaimed, was to be sold for cash ("the proceeds of the surplus new stock"): ibid., s 12. Stock certificates were to be issued under the signatures of two directors of the railway company: ibid., s 36 (later amended by the 1924 Act, below, to one director's signature).

[67] The 1906 Act, ss 18-20. The new stock was to be held by trustees subject to the same provisions and restrictions as applied to the original holding and, so far as the railway company was concerned, each registered stockholder was deemed to be "alone and absolutely entitled" to the stock in their name: ibid., s 19.

[68] The 1906 Act, ss 16, 17. Those "officers clerks and servants" affected were the ten individuals named as pensioners in schedule D to the Act. The pensions were to be provided from the three accounts recited in paragraph 2 of schedule B.

[69] The 1906 Act, ss 21-25. Prior to a claim being made, claimants were required to give public notice by advertisement in "one or more newspapers circulating in London and elsewhere": ibid., s 23. In the event that the Secretary of State was not satisfied as to the validity of any claim, or where a claim was disputed by a third party, application could be made by the claimant to the High Court for a declaratory order. Verified claims were to be honoured either by payment in the 3% India stock or, if the new stock had not been issued, in monetary value. Any new stock remaining unallocated could be disposed of by the company's board, as they thought fit. Notices to be given under the 1906 Act were to be by advertisement "in a London daily newspaper" and (if necessary) "in any other English newspaper and in any Indian newspaper": ibid., s 49.

[70] The 1906 Act, ss 26-35 and 50. The company board was required to distribute the property mentioned in schedule B to the Act proportionately to the then registered stockholders (less deduction of moneys earmarked for pensions, plus "further remuneration" for the directors for "their past services") together with the proceeds of the surplus new stock and the sum of 2 million (as per the 1905 contract), and to pay a final dividend on transferred old stock (using surplus profits). Dividends were to be paid through the post (ibid., s 50). Moneys unclaimed were to be paid over to, and held by, the Secretary of State pending future claims: ibid., s 26. The board was also empowered to enter into contracts with the Secretary of State for various purposes, including: constructing, maintaining and operating railways within its own system and "in any part of India" and undertaking all ancillary actions (together with working ferries and steamers), granting wayleaves, operating "running powers" on other lines, issuing stock and debentures, and facilitating the "control and supervision" by the Secretary of State of the company's activities (by the appointment of two board directors and by the exercise of a power of veto): ibid., s 27. The railway company's own system included all those lines recited in schedule F to the Act, namely five "state railways" (Rajputana - Malwa, Cawnpore - Achnera, the Bindraban branch, Godhra - Rutlam and Rutlam - Nagda), plus three railways "belonging to other companies" (Ahmedabad-Prantej, Tapti Valley and Ahmedabad-Dholka). Sections 28 to 35 governed the powers of new stockholders, continuity of, and qualification for, directorships (with an initial maximum of six appointments), director remuneration, and quoracy.

[71] The 1906 Act, ss 37-48. The company's board was entitled at any time, by resolution, to make calls on stockholders to pay outstanding amounts and, in default, could enforce payment by charging interest on the sums due, by refusing to register stock transfers, and, on notice, by effecting forfeiture of the relevant stockholding (which would then be sold). In India the stockholder register entries were to be copied to the London office, and an official seal was to be provided to the India office for the purpose of executing company documents. General meetings of stockholders were to be convened both twice-yearly, and on specific requisition (each following public notice), with a quorum of 20, and voting was to accord with the provisions in sections 47 and 48.

[72] Bombay Baroda and Central India Railway Act 1924 (14 & 15 Geo.5 c.vii), ss 3, 5. Section 3, cast in less than specific terms, purported to repeal "[s]o much of section 43 (general meetings) of the Act of 1906 as requires meetings of stockholders to be convened twice in each year"; and section 5 amended section 21 of the 1906 Act (relating to unclaimed stock) by repealing nine words from the text. Sections 6 and 7 made minor amendments to the 1906 Act, ss 36 and 46 respectively (relating to stock certificates, and to quorums).

[73] Bombay Baroda and Central India Railway Act 1938 (1 & 2 Geo.6 c.x), s 3 amending the 1906 Act, s 27 (relating to contracts with the Secretary of State).

[74] Bombay Baroda and Central India Railway Act 1942 (5 & 6 Geo.6 c.v), s 13 and Sch B. The 1942 Act repeal provisions covered the entirety of the Acts of 1906, 1924 and 1938.

[75] Using the analogy of contract law, it took the form of a kind of condition precedent.

[76] In other words, proof of the publication of the "advertised" notice is not of itself essential to demonstrate that the Acts have been repealed.

[77] The inference is to some extent corroborated by the terms of the pre-independence Railway Companies (Substitution of Parties in Civil Proceedings) Act 1946 (No. 14 of 1946) (India), preamble and s 3 which provided that, in any pending civil proceedings involving various railway companies (including the Bombay Baroda and Central India) the Governor- General in Council, acting on behalf of the "central government", would be substituted for the relevant company, and that references to any company would "be construed as including references to the liquidators of that company". At minimum this demonstrates that the Bombay Baroda and Central India Railway Company had relinquished most, if not all, of its responsibilities. That approach is consistent with the preamble to the 1942 Act which recited that it was then "expedient that the affairs of the company be wound up and that the company be dissolved". The National Archives hold such records as it has on the railway company within its "dissolved" series.

[78] Preamble to the Bombay Baroda and Central India Railway Act 1924 (14 & 15 Geo.5 c.vii) ("the 1924 Act"), being "An Act to amend the Bombay Baroda and Central India Railway Act 1906 and for other purposes". The short title to the Act was assigned by section 1.

[79] The 1924 Act, s 3. The section repealed that part of the 1906 Act, s 34 which required general meetings to be held twice-yearly, and replaced it with a provision allowing annual general meetings, convened before the end of the calendar year, to receive an annual balance sheet based on the preceding financial year. This section specifically overrode conflicting provisions in the Companies Clauses Consolidation Act 1845, s 116.

[80] The 1924 Act, s 4. All interim dividends were to be offset from the final dividend declared payable at the following AGM.

[81] The 1924 Act, ss 5-7. The sections in the 1906 Act amended were sections 21, 36 and 46 (for which, see discussion above). The quorum for stockholder general meetings was reduced from 20 to 10.

[82] The 1924 Act, ss 8, 9. The railway company was no longer required to affix its common seal to the stockholder registers.

[83] See the 1924 Act, s 2, which extended the meanings of expressions used in the earlier Act to the 1924 Act.

[84] The 1942 Act, s 13 and Sch B. The repeal was intended to relate to the whole Act (operative from the date of the winding up resolution).

[85] Preamble to the Bombay Baroda and Central India Railway Act 1938 (1 & 2 Geo.6 c.x) ("the 1938 Act"), being "An Act to amend the Bombay Baroda and Central India Railway Act 1906 and to enable the Bombay Baroda and Central India Railway Company to provide road and air transport services and for other purposes". The short title to the 1938 Act was assigned by section 1.

[86] The base was contained in the 1906 Act, s 27 (see discussion above, under the 1906 Act).

[87] The cost of promoting and obtaining the Act was to be borne by the railway company as part of its "working expenses" for 1937 and 1938: the 1938 Act, s 5.

[88] The 1938 Act, s 3. This was achieved by amendment of the 1906 Act, s 27 by inserting new sub-sections after section 27(G) (referred to erroneously in the 1938 Act as "sub-clause[s]") and by deleting a proviso at the tail end of section 27.

[89] The 1938 Act, s 4. The balance sheet was to contain "such particulars" as were to be prescribed "from time to time".

[90] See the 1938 Act, s 2. Meanings within the 1906 Act were to be read as amended by any Orders in Council made pursuant to the Government of India Act 1935 (c.42), s 311(5) [now repealed].

(f) to provide for the handling of unclaimed stock, which was to be transferred to the Secretary of State who was then bound to indemnify the railway company, and the establishing of subsequent claims;[69]

(g) to make arrangements for the management of the transitional period (including the realisation and distribution of certain property by the railway board, and the handling of various contracts), during and after formal transfer of the undertaking;[70] and

(h) to regulate the handling of the new stock in terms of calls on unpaid stock (and forfeiture for non-payment), the keeping of branch registers in India for holdings and transfers, and the convening and conduct of general meetings.[71]

Status of the 1906 Act

9. The 1906 Act was designed to supersede the Acts of 1855, 1859 and 1898 (which were all repealed by it, subject to certain savings), and to form a new basis for the Bombay Baroda and Central India Railway's operations. Its prime purpose was to facilitate and effect the transfer by sale of the railway undertaking to the Secretary of State in Council of India.

10. Subsequently, the 1906 Act was subject both to minor amendment and to partial repeal by the 1924 Act (see below);[72] to minor amendment by the 1938 Act (see below);[73] and then - at least on the face of the statute - to whole repeal by the 1942 Act (see below).[74] However, the 1942 Act repeal mechanism was framed so that it only operated on the occurring of a particular event (namely, the passing by the railway company of its winding up resolution).[75]

11. The 1942 Act provided (in section 13) that "the Acts specified in Schedule B hereto shall be from the date of such resolution wholly repealed". The section required the directors first, to realise and distribute the company's property; then, to pass the winding up resolution; and finally, to advertise the resolution in the London Gazette. Once all three steps had been undertaken, the company was deemed to "be by virtue of this Act dissolved" and "thenceforth [to] cease to exist". However, the repeal of the three Acts was to occur (or so it appears on a straight literal interpretation of the statute) when only the first two steps had been taken, ie. from the moment when the resolution had been passed.[76]

12. Unfortunately, there is no trace of a notice having been published in the London Gazette in or around 1942. That omission may stem from one of several possibilities, not least of all that this was to have been transacted in wartime London. The indications from the Companies Register records (albeit sparse), however, are that the Bombay Baroda and Central India Railway Company was probably dissolved in the period 1946 to 1951 and is no longer in being.[77]

13. Assuming the 1906 Act was not repealed under the arrangements set out in the 1942 Act (which it may have been), it can be said that the 1906 Act is now spent and may be repealed in whole.

Extent

14. The 1906 Act related principally to the affairs of the Bombay Baroda and Central India Railway Company, which was a significant operation, having responsibility for the running of several lines within its own network, and various lines controlled by other railway companies. The company operated in British India (mainly in the Bombay presidency and in central India) and in England (in London). 15. The Act applied to Great Britain and to India (in the states of Maharashtra and Gujarat).

Bombay Baroda and Central India Railway Act 1924 (14 & 15 Geo.5 c.vii) - Purpose

16. The Bombay Baroda and Central India Railway Company had (under the 1906 Act: see above) been reincorporated with an initial capital of 2 million following the Secretary of State's acquisition of it in December 1905, and had distributed to its then stockholders the India 3% stock issued to it by the Secretary of State. By 1924 the railway company was still maintaining, managing and working its railway system on behalf of the Secretary of State.[78]

17. By this stage it had become "expedient" that the number of stockholder general meetings should be reduced from twice-yearly to once a year to receive the annual accounts, and that other minor adjustments be made to the arrangements in the 1906 Act. To this end, the 1924 Act was obtained, with the following purposes:

(a) to vary the provision for the holding of general meetings of stockholders;[79]

(b) to empower the railway company's directors to pay an interim dividend to the stockholders, without the necessity of a general meeting, following receipt of a guaranteed interest instalment from the Secretary of State or from the dividend funds (including those with accrued excess profits);[80]

(c) to make minor amendments to provisions in the 1906 Act relating to unclaimed stock and the absence of registration, the signing by directors of stock certificates, and the reduction of the quoracy requirements;[81] and

(d) to provide for the combining of stockholder registered details, and to relax the qualification requirement for company auditors.[82]

Status of the 1924 Act

18. The 1924 Act was designed to make detail adjustments to the scheme set out in the 1906 Act, and was to be read in conjunction with that Act.[83]

19. The 1924 Act was made the subject of repeal by the 1942 Act[84] (see below) but, for the reasons explained in connection with the 1906 Act (see earlier in this note), it is far from clear whether the 1924 Act was so repealed. In summary, the statutory condition precedent may not have been complied with and, technically at least, the 1924 Act may still be extant.

20. Assuming the 1924 Act was not repealed under the arrangements set out in the 1942 Act (which equally it may have been), it can be said now that the 1924 Act is spent and may be repealed in whole.

Extent

21. The 1924 Act related principally to the affairs of the Bombay Baroda and Central India Railway Company, which had responsibility for the running of several lines within its own network, and additionally various lines controlled by other railway companies. The company operated in British India (mainly in the Bombay presidency and in central India) and in England (in London).

22. The Act applied to Great Britain and to India (in the states of Maharashtra and Gujarat).

Bombay Baroda and Central India Railway Act 1938 (1 & 2 Geo.6 c.x) - Purpose

23. By 1938 the operation of the Bombay Baroda and Central India Railway Company had expanded and diversified. The railway company now wanted "to provide road and air transport services" in addition to its rail operations, and "to construct and equip road vehicles and aircraft".[85] The 1906 Act had provided a base of contract-making powers, but that base was insufficiently broad to encompass these new ventures.[86] In order to widen its powers, the company promoted what was to become the 1938 Act.[87] The purpose of the Act (which was very short) was:

(a) to extend the railway company's power to enter into contracts with the Secretary of State to include those for the delivery, "in any part of India", of "road vehicle and aircraft transport services", through the construction and equipping of road vehicles and aircraft, and the ability to contract with other bodies which could facilitate such delivery (including providing financing arrangements);[88] and

(b) to require the railway company to file an annual balance sheet with "one of His Majesty's Principal Secretaries of State".[89]

Status of the 1938 Act

24. The purpose behind the 1938 Act was very narrow: in essence, simply to bestow further powers on the railway company so that it could (with governmental consent) extend its range of transport services and diversify its operations.

25. The 1938 Act was to be read in conjunction with the 1906 Act because (a) it specifically amended that Act, and (b) it was to be interpreted in a consistent manner.[90] Thus the 1906, 1924 and 1938 Acts formed a continuum.

26. As with the Acts of 1906 and 1924, the 1938 Act was - by the 1942 Act - purported to be repealed.[91] However, as indicated above, the repeal was dependant upon a condition precedent which may well have occurred, but of which there appears to be no documentary proof.

27. Assuming that the 1938 Act was not repealed under the arrangements in the 1942 Act, today the Act serves no useful purpose. It is now spent and can be repealed in whole.

Extent

28. The 1938 Act related only to the affairs of the Bombay Baroda and Central India Railway Company, which had responsibility for the running of several lines within its own network, and additionally various lines controlled by other railway companies. The company operated in British India (mainly in the Bombay presidency and in central India) and in England (in London).

29. The Act applied to Great Britain and to India (in the states of Maharashtra and Gujarat).

Bombay Baroda and Central India Railway Act 1942 (5 & 6 Geo.6 c.v) - Purpose

30. The Bombay Baroda and Central India Railway Company was formed "for the purpose of making and maintaining such railways in India as might be agreed upon between the company and the East India Company".[92]

31. A raft of six Acts, spanning the years 1859 to 1938, had been passed to facilitate operation of the railway company (and, more particularly, to empower the company to enter into a variety of contracts with the Secretary of State in Council of India and, later, the Governor-General in Council, and to issue new capital stock). Under certain contracts made in accordance with the contracting powers, the Secretary of State was given the right to purchase "the railways works and premises" for significant financial consideration. That right was exercised in 1905, and "temporary arrangements were [then] made for the maintenance management and carrying on of the company's railway system".[93]

32. The 1906 Act[94] authorised the railway company to contract with the Secretary of State for "(among other purposes) the construction equipment maintenance and management of the company's railway system and of any other railway in India".[95] Under this widened remit, the company had contracted (between 1907 and 1913) to continue the "working and management of the railways" for an agreed remuneration package and, at the end of the contract period, to hand over to the Secretary of State all the rolling stock, plant, machinery, stores, plans and documentation, telegraphic equipment and so on.[96] The contract period was terminable on 31 December 1941 (or at intervals of five years thereafter), on the Secretary of State giving advance notice to the company.

33. By notice given in December 1941 (by the Governor-General of India in Council, as successor to the Secretary of State), the management contracts were terminated. The balance of the purchase price and the outstanding debenture stock were both paid off, leaving the company to be dissolved.[97] Winding up could only be achieved by new legislation.

[91] The 1942 Act, s 13 and Sch B.

[92] Preamble to the Bombay Baroda and Central India Railway Act 1942 (5 & 6 Geo.6 c.v) ("the 1942 Act"), the long title of which was "An Act for the winding up and dissolution of the Bombay Baroda and Central India Railway Company and for giving effect to arrangements made with the Governor-General of India in Council". The short title of the 1942 Act was assigned (for the purposes of citation) by section 1.

[93] The 1942 Act, preamble. The preamble set out a recital of the Acts, which were passed in 1855, 1859, 1898, 1906, 1924 and 1938. Contracts were entered into in 1905, 1907, 1908 and 1913 (the last three of which were later determined by notice expiring in 1941).

[94] Discussed above.

[95] The 1942 Act, preamble.

34. To this end, the 1942 Act was promoted. The Act had, in broad terms, the following purposes:

(a) to permit, "with all convenient speed", the company to realise its assets with a view to winding up;[98]

(b) to require, on "the appointed date", the company to transfer undistributed dividend and debenture stock interest to the Secretary of State to be held pending claims (which either he or, in the event of inadequate validation, the High Court would determine);[99]

(c) to authorise (from 1 January 1942) the cancellation of the company's liabilities affecting its provident fund, and the termination of all contracts with the Secretary of State (subject to handing over any remaining property to the Governor- General, and the Governor-General paying interest to any outstanding debenture stock-holders);[100]

(d) to require the giving of public notice for the submission of claims, and the distribution of the company's assets according to a prescribed sequence (with provision for a small contingency fund);[101] and

(e) to permit the company to be formally dissolved on completion of distribution of the assets and publication of notice of the directors' winding up resolution.[102]

[96] The 1942 Act, preamble.

[97] The railway company at that time had no real estate holdings except a leasehold (rack rent) interest in premises at 91 Petty France in the city of Westminster: the 1942 Act, preamble.

[98] The 1942 Act, s 2. By section 7, five named existing directors were authorised to remain in office pending completion of the company's winding up (with provision for filling vacancies).

[99] The 1942 Act, ss 3, 12.

[100] The 1942 Act, ss 4-6.

[101] The 1942 Act, ss 8, 9. All money paid to stockholders was to be held by them on the same trusts, or subject to the same rights and restrictions, as applied to the original holding; and all persons under legal disability were authorised (through their trustees) to give proper discharge for moneys received: ibid., ss 10, 11.

[102] The 1942 Act, s 13. The notice of resolution was to be published in the London Gazette, and the resolution had the effect of repealing three Acts set out in Schedule B to the 1942 Act - the Acts of 1906, 1924 and 1938: ibid. The costs of obtaining the 1942 Act were to be borne by the Secretary of State and the company "in such proportions as may be agreed between them": ibid., s 14.

Status of the 1942 Act

35. The sole purpose of the 1942 Act was to bring to an end the operation of the Bombay Baroda and Central India Railway Company as an entity, its assets having already been purchased by the then Government of India. The 1942 Act also contained a mechanism for repeal of three earlier Acts.[103]

36. The railway company was probably dissolved in the period 1946 to 1951.

37. The 1942 Act is now spent and may be repealed in whole.

Extent

38. The 1942 Act related only to the affairs of the Bombay Baroda and Central India Railway Company.

39. The Act applied to Great Britain (where, in 1942, the railway company held leasehold property) and to the states of Maharashtra and Gujarat, in India.

Consultation

40. HM Treasury, the Foreign and Commonwealth Office, the Department for International Development, the Department for Business, Enterprise and Regulatory Reform, Companies House, the Bank of England, the High Commission of India, and the relevant authorities in Scotland, Wales and Northern Ireland have been consulted about the repeal proposals set out in this note.

32-195-50
LAW/005/017/06
9 July 2007

[103] The 1942 Act, s 13 and Sch B (relating to the Acts of 1906, 1924 and 1938).

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