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

Madras Railway Company

Acts Covered: 16 & 17 Vict. c.xlvi (1853) (Madras Railway)
17 & 18 Vict. c.xxix (1854) (Madras Railway Company)
18 & 19 Vict. c.xl (1855) (Madras Railway)
Madras Railway Annuities Act 1908 (8 Edw.7 c.iii)
Madras Railway Annuities Act 1922 (12 & 13 Geo.5 c.vii)

Background

1. The first Madras Railway Company was established in 1845. After difficulties getting started, the company was dissolved in 1847. Following a period of additional groundwork and research, the company directors re-established the company, and it was incorporated in England, by Act of Parliament, in 1853.

2. The company contracted with the Indian Government for a 4 to5% guaranteed return on the funds needed to construct lines from Chennai (formerly Madras) to Beypore (formerly Vaypura), and from Chennai to the existing Mumbai (formerly Bombay) line. This amounted to a stretch of 820 miles. Construction began on the first section of the company's network in 1853. The first train ran along the completed line from Chennai to Wallajah Road in 1856. Construction continued and the Madras Railway network expanded significantly.

3. The contract of guarantee expired on 31 December 1907, and the Secretary of State purchased the company's lines. On 1 January 1908, the Madras Railway Company was amalgamated with the Southern Mahratta Railway Company and renamed the Madras and Southern Mahratta Railway. The government took full control of the railway in April 1944. All the contracts determined and the company became an entirely state-owned enterprise.[391]

4. The Madras and Southern Mahratta Railway Company went into voluntary liquidation in February 1950. A notice was published in the London Gazette.[392]

5. Five Acts relating to the Madras Railway Company were promoted over the lifetime of the company: Madras Railway Act 1853 Madras Railway Company Act 1854 Madras Railway Act 1855 Madras Railway Annuities Act 1908 Madras Railway Annuities Act 1922. All five of these Acts are proposed for repeal in the following note.

16 & 17 Vict. c.xlvi (1853) (Madras Railway) - Purpose

6. In July 1852 (under a deed of settlement) the Madras Railway Company was formally created in the City of London "for the purpose of acquiring and holding lands in the East Indies and Great Britain, and making, acquiring, and working one or more railway or railways in India" together with all such things as "might be deemed advisable or desirable for efficiently carrying [the project] into effect".[393] To this end, the railway company was empowered to enter into contracts with "Her Majesty's Government in this country [Great Britain] or in India, or with the Honourable East India Company" so that "one or more line or lines of railway" could be constructed and maintained.[394]

7. By September 1852, the bulk of the shares had been subscribed, and the railway company had been registered with the Registrar of Joint Stock Companies.[395] In December, the railway company contracted with the East India Company to "make, construct, and maintain an experimental line of railway" commencing at Madras (now Chennai) and working towards "the western coast of India" (together with "all necessary and convenient extensions and branches", plus running stock and works).[396] However, in order to carry into effect its "objects and purposes", the railway company needed to be statutorily incorporated and given additional powers. To this end the 1853 Act was promoted and obtained.

8. The principal purposes behind the 1853 Act (in broad terms) were:

(a) to authorise the various proprietors of the railway company to form "one body corporate" for the purpose of "making and constructing, working and maintaining" the agreed railway undertaking;[397]

(b) to continue in effect the regulatory provisions of the 1852 deed of settlement relating to the railway company, but subject to the variations made by the 1853 Act and certain provisions within the Companies Clauses Consolidation Act 1845 [398] (which were deemed to be incorporated within the 1853 Act);[399]

(c) to authorise an EGM of the railway company to appoint directors to serve for a maximum term of five years;[400] and

(d) to continue in effect all existing contracts and arrangements previously entered into with the East India Company (and particularly the construction contract of December 1852), which henceforward would be enforceable against the incorporated railway company,[401] and to empower the railway company to enter into new contracts and arrangements with the East India Company "on account of the Government of India" for the purposes of making, maintaining and working "any railway or railways in India" and associated telegraphs, and of providing various rights to the East India Company.[402]

Status of the 1853 Act

9. The 1853 Act was designed to provide both statutory incorporation for the Madras Railway Company and powers for the railway company to create a viable commercial undertaking. The Act was the first in a series of empowering statutes spanning the period 1853 to 1922.

10. The 1853 Act has not been the subject of amendment or partial repeal.

11. The Madras and Southern Mahratta Railway Company (as successor to the Madras Railway Company) was dissolved in 1950. The East India Company, which had a significant stake in the railway company (before that passed to the Secretary of State for India), ceased to function in 1874.

12. The 1853 Act is now spent and may be repealed in whole.

Extent

13. The 1853 Act related to the affairs of the newly formed Madras Railway Company (and, to a lesser extent, the affairs of the East India Company). The railway company operated in India and in Great Britain.

14. The Act applied to Great Britain and to India (in the states of Tamil Nadu and Karnataka).[403]

17 & 18 Vict. c.xxix (1854) (Madras Railway Company) - Purpose

15. By 1854, the Madras Railway Company had embarked upon the construction phase of the "experimental line", at an estimated cost of £0.5 million (later revised to £1 million). The railway company had already agreed with the East India Company in August 1853 that the "experimental line" should be extended in the direction of the western coast of India via Vellore, Vanaimbady, Salem and Coimbatore, with branchlines running to Bangalore and to the foothills near Ootacamund (now Udhagamandalam).[404] More recently, the East India Company had proposed the construction of "some other railway or railways from the city of Madras or elsewhere in the East Indies".[405]

16. In order to carry into effect these projects (and the objects of the railway company), there was need for additional statutory power. To that end the relatively short 1854 Act was promoted. The purposes of the Act were (in broad terms) these:[406]

(a) to authorise the railway company to enter into contracts with the East India Company, "on account of the Government of India", for the extension of the experimental line to the western coast of India, the construction of branchlines to Bangalore and to near Ootacamund, and the construction and maintenance of "any other railway or railways in the East Indies" as may be expedient;[407]

(b) to authorise the railway company to increase its capital to an uncapped sum, by the creation of additional £20 shares, so as to fund "the proposed or any future contract or contracts" with the East India Company;[408] and

(c) to extend the railway company's secured borrowing power up to a figure not exceeding one-third of the company's subscribed capital.[409]

Status of the 1854 Act

17. The principal purpose of the 1854 Act was to extend the powers given to the Madras Railway Company by the original deed of settlement (1852) and by the 1853 Act. Those powers related to the ability to contract, to increase share capital, and to borrow. The 1854 Act was inextricably linked in its operation to both of these earlier instruments.

18. The 1854 Act has not been the subject of amendment or partial repeal.

19. The Madras and Southern Mahratta Railway Company (as successor to the Madras Railway Company) survived as an operational undertaking until it was dissolved in 1950.

20. The 1854 Act is now spent and may be repealed in whole.

Extent

21. The 1854 Act related principally to the affairs of the Madras Railway Company. The railway company operated in India (between Madras on the east coast and Coimbatore in the west, reaching on to the west coast) and in Great Britain.

22. The Act applied to Great Britain and to India (in the states of Tamil Nadu and Karnataka).[410]

18 & 19 Vict. c.xl (1855) (Madras Railway) - Purpose

23. By June 1855, the Madras Railway Company and the East India Company were almost ready to enter into a contract to extend the "experimental line" to the western coast of India at an estimated cost of £3.5 million "or thereabouts". The whole of the original capital allocation of £0.5 million had been subscribed (and more than £0.4 million paid up), and had been supplemented by an additional share issue worth £0.5 million.

24. The railway company was faced with the problem of insufficient take-up of shares in Great Britain, which was an obstacle to completing the railway and works "as rapidly as possible" (an aspiration "of great public importance").[411] The company needed to turn to the East Indies to raise working capital, but that fell outside its statutory competence. The solution was promotion of a further Bill to secure the power to issue and transfer shares and securities beyond Great Britain. The purpose of the 1855 Act was (in broad terms):[412]

(a) to authorise the railway company's directors to establish offices in India for the issue, transfer and registration of shares and other securities, and to extend to India all the powers contained in the 1852 deed of settlement, and the previous Acts, relating to such transactions;[413]

(b) to require the directors to maintain in India various official registers for the purpose of the registration and transfer of securities;[414]

(c) to authorise the directors to issue bonds (in England) and debentures (in India) up to £1,000 each and paying interest of up to 5% p.a.;[415] and

(d) to require that the interest payable by the East India Company on the capital borrowed be financed from the railway company's net profits, and that any residue be paid as dividend to the shareholders.[416]

Status of the 1855 Act

25. The 1855 Act's purpose was to provide the Madras Railway Company with fundraising powers which would extend to India. The Act was designed to operate in tandem with the two previous Acts of 1853 and 1854.

26. The 1855 Act has not been the subject of either partial repeal or amendment.

27. The Madras and Southern Mahratta Railway Company (as successor to the Madras Railway Company) was dissolved in 1950.

28. The 1855 Act is now spent and may be repealed in whole.

Extent

29. The 1855 Act related principally to the affairs of the Madras Railway Company. The railway company operated in India (between Madras - now Chennai - on the East Coast and Coimbatore in the west, reaching on to the West Coast) and in Great Britain.

30. The Act applied to Great Britain and to India (in the states of Tamil Nadu, Karnataka and Kerala).

Madras Railway Annuities Act 1908 (8 Edw.7 c.iii) - Purpose

31. In April 1907 (pursuant to a series of contractual powers stretching from 1852 to 1901), the Secretary of State in Council of India, as successor to the East India Company,[417] gave notice to the Madras Railway Company of his intention to purchase the entire railway network.[418] On 31 December 1907 the undertaking and its assets passed to the Secretary of State, subject to "such debts and liabilities as [had] been incurred by the company to His Majesty or the Secretary of State or to any person or persons with the sanction of the Secretary of State".[419] The Secretary of State was liable for payment of the purchase price (just over £12.8 million), plus redemption of the debenture loans and interest.[420]

32. Prior to transfer, the railway company had established and administered various funds.[421] On the transfer the fund liabilities also passed to the Secretary of State.[422]

33. Rather than pay out a lump sum for the railway purchase, the Secretary of State opted to pay by annuity instalments (in accordance with provisions contained in a contract executed in January 1871). The final annuity payment was due to be made on 1 April 1956.[423]

34. At the point of transfer it became "expedient" to make provision for the dissolution of the railway company.[424] The stock and transfer registers had already been closed. The next step was to create a sinking fund so that stockholders could exchange their stock for annuities, with the option of a sinking fund attached. In order to validate the closing of registers, and to effect the transfer of stock and the management of annuities, further parliamentary authority was required.[425] To this end, the 1908 Act was promoted.

35. The Act had the following purposes (put in broad terms):[426]

(a) to effect retrospective transfer of certain of the railway company's assets (from 31 December 1907) to the Secretary of State, and to terminate any right of claim against the company under any contract relating to advances by the East India Company or the Secretary of State in respect of interest on loan capital or debentures;[427]

(b) to provide for the termination of all contracts between the East India Company or the Secretary of State and the railway company, excepting those relating to "the creation issue and guarantee of debentures or to interest thereon";[428]

(c) to provide for the Secretary of State taking over liability for the railway company's debenture payments (both the principal moneys and interest);[429]

(d) to authorise the creation by the Secretary of State of the annuity to purchase the railway undertaking, in lieu of a lump sum payment of almost £12.82 million, which annuity was to be paid to annuity trustees in London on a half-yearly basis until April 1956;[430]

(e) to require the annuity trustees to divide the annuitants into two classes, so as to facilitate the provision of a sinking fund which would produce a capital sum maturing in April 1956;[431] to require the annuity trustees half-yearly to make a distribution of annuities to the Class A and Class B annuitants; and to establish and contribute to the sinking fund (into which would be placed the Class B deductions);[432]

(f) to require the sinking fund trustees to hold the fund in trust for the various Class B beneficiaries and, on maturity, to realise and pay over the fund to the annuity trustees for distribution amongst the beneficiaries;[433]

(g) to regulate the functioning of the annuity trustees (including a requirement to appoint a secretary and other officers necessary to manage the annuities and related matters),[434] and of the meetings of annuitants;[435]

(h) to regulate the holding of stock by trustees of private trust funds;[436]

(i) to make provision for the handling of unclaimed stock and debenture interest, and of unclaimed debenture principal (payable from moneys advanced by the Secretary of State);[437]

(j) to authorise the Secretary of State to acquire old railway company stock or annuities in exchange for "share capital stock of the Madras and Southern Mahratta Railway Company Limited" and, in the case of Class B annuities, to withhold contributions to the sinking fund;[438] and

(k) on formal dissolution of the railway company, to require the board to distribute any surplus closing profits, and the balance on the "separate fund account", to the then registered stockholders (after deduction of authorised expenses).[439]

Status of the 1908 Act

36. The 1908 Act formed the continuation of a series of Acts, starting in 1853, relating to the Madras Railway Company. It was a fairly complicated piece of legislation designed to pave the way for the railway company's demise, and for the smooth transfer of assets to the then government of India.

37. The 1908 Act was an integral link in the legislative chain, although it neither amended nor repealed any of the earlier railway Acts. However, the 1908 Act itself was subject to minor alteration by the Madras Railway Annuities Act 1922 (see below): section 23 (post-distribution of the sinking fund) was repealed, and section 60 (deduction by annuity trustees of management expenses) was amended.

38. The Madras and Southern Mahratta Railway Company (as successor to the Madras Railway Company) was dissolved in 1950.

39. The 1908 Act is now spent and may be repealed in whole.

Extent

40. The 1908 Act related principally to the affairs of the Madras Railway Company. That company operated in India (across the southern peninsula, between the east and west coasts) and in Great Britain.

41. The Act applied to Great Britain and to India (in the states of Tamil Nadu, Karnataka and Kerala).

Madras Railway Annuities Act 1922 (12 & 13 Geo.5 c.vii)

Purpose

42. By 1922, the Secretary of State in Council of India had created, as part of the purchase arrangement (in respect of the Madras Railway Company and its railway undertaking), an annuity of almost £553,400 "charged on the revenues of India".[440] That annuity was payable to annuity trustees, by half-yearly instalments, from 1908 until 1956.[441]

43. Pursuant to the 1908 Act a separate "sinking fund" had also been established, held by sinking fund trustees. Those trustees were required, in or about April 1956, to realise and pay to the annuity trustees the proceeds of their matured fund, which would be divided and distributed by the annuity trustees to the then registered Class B annuitants. Although the 1908 Act had made provision for the reimbursement of the sinking fund trustees' management expenses, it had failed to make similar provision to reimburse the annuity trustees for their expenses in administering the distribution process and winding up the trust.[442]

44. In order to make adjustments to the earlier arrangements, the annuitants authorised the annuity trustees to promote what became the (very short) 1922 Act.[443] That Act had the following two purposes:

(a) to require the sinking fund trustees, in April 1956, to realise and transfer their accumulated fund to the annuity trustees, who were to apportion the moneys between the then registered Class B annuitants (and who were to be entitled to deduct from the fund "all costs charges and expenses incurred" by them in the distribution and winding-up process);[444] and

(b) to amend the monetary formula (set out in the 1908 Act) for calculation of the annuity trustees' expenses of management.[445]

Status of the 1922 Act

45. The 1922 Act was the last in the series of Acts relating to the Madras Railway Company and its operations. It was inextricably linked to the 1908 Act (which laid down the scheme for transfer of the undertaking and dissolution of the company), and simply effected detailed changes to the mechanisms in the earlier Act. The two Acts were to be read as one.

46. The Madras and Southern Mahratta Railway Company (as successor to the Madras Railway Company) was formally dissolved in 1950.

47. The 1922 Act is now spent and may be repealed in whole.

Extent

48. The 1922 Act related principally to the affairs of the Madras Railway Company. That company operated in India (across the southern peninsula, between the east and west coasts) and in Great Britain.

49. The Act applied to Great Britain and to India (in the states of Tamil Nadu, Karnataka and Kerala).

Consultation

50. 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

Notes

  1. [391] For further information, see Ghosh, S. Railways in India - A Legend (2002) Jogemaya Prokashani, Kolkata; Government of India Railway Board, History of Indian Railways Constructed and In Progress corrected up to 31st March 1918 (1919) Government Central Press, India.

  2. [392] The London Gazette, Issue 38837, 10 February 1950, page 737. The archives of the Board of Trade contain records relating to the Madras Railway Company. The relevant reference numbers are BT285/256 and BT41/415/2356.

  3. [393] Preamble to 16 & 17 Vict. c.xlvi (1853) ("the 1853 Act") being "An Act for incorporating the Madras Railway Company, and for other Purposes connected therewith". The railway company had previously been established in provisional form, with a number of individuals subscribing to share capital to be held by two named trustees. The affairs of the formal company were to be conducted by a board of directors.

  4. [394] The 1853 Act, preamble.

  5. [395] In accordance with 7 & 8 Vict. c.110 (1844) (subsequently repealed by Companies Act 1862, c.89).

  6. [396] The 1853 Act, preamble.

  7. [397] The 1853 Act, s 1. The incorporated company was to have perpetual succession and a common seal, and was to be capable of conducting legal proceedings both in "the territories now under the government of the East India Company as elsewhere", and to hold land for its purposes "in the said territories and in Great Britain": ibid. All the property and documentation of the former company were automatically to vest in the newly-formed railway company, which also would become responsible for all existing liabilities: ibid., s 2.

  8. [398] 8 & 9 Vict. c.16 (1845).

  9. [399] The 1853 Act, s 3. The preserved 1845 Act provisions related, amongst other things, to the making of byelaws by the railway company (which were to be as enforceable in India as in England: see the 1853 Act, s 5 on recovery of penalties), and the consolidation of company shares into stock. Apart from these provisions, the 1845 Act was in the main to be disapplied (excepting those provisions relating to promissory notes and bills of exchange, and the auditing of accounts). The content of the deed of settlement could subsequently be varied (with certain exceptions) by two consecutive extraordinary general meetings on a 2/3rds vote of shareholders. Where notice had to be given to shareholders under "the said deed of settlement or otherwise" it was to be sufficient to place an advertisement in any two daily newspapers published in London or Middlesex: ibid., s 8.

  10. [400] The 1853 Act, s 4, notwithstanding different provision made in the original deed of settlement.

  11. [401] The 1853 Act, s 6.

  12. [402] The 1853 Act, s 7. The various rights to be vested in the East India Company included the supervision and control of the railway company and of its works and proceedings both in England and in India; the power to appoint an ex officio director to the board (with a right of veto) and to influence the appointment of agents for the railway company "in India or elsewhere"; the power of the East India Company to grant or lease land to the railway company; and the right of the East India Company to purchase, or take a surrender of, the whole or part of the railway undertaking "at any future period" (with a general provision for resolving disputes by arbitration in accordance with the Companies Clauses Consolidation Act 1845).

  13. [403] This Act did not extend to Kerala (as did other Acts in this series) because, in 1853, the line had not been laid into Kerala.

  14. [404] Preamble to 17 & 18 Vict. c.xxix (1854) ("the 1854 Act") being "An Act to amend an Act, intituled An Act for incorporating The Madras Railway Company, and for other Purposes connected therewith." The estimated cost of the now significantly-enhanced project was £3.5 million. £0.5 million of capital had already been raised by subscription to the original share issue, and in September 1853 the board of the railway company had authorised the increasing of its capital to £1 million by a further share issue.

  15. [405]

  16. [406] The 1854 Act, preamble. Madras, situated on the eastern coast of India, is today known as Chennai.

  17. [407] The 1854 Act was not to alter impliedly any provision in the 1852 deed of settlement or the 1853 Act of incorporation: the 1854 Act, s 5.

  18. [408] The 1854 Act, s 1. The project was to progress "either in one or more sections respectively, and either by the route aforesaid, or by any other route that may be preferred thereto", and was to include "the making of surveys and other preliminary arrangements": ibid.

  19. [409] The 1854 Act, s 2. The previous restriction on shareholders holding shares, or parts of shares, jointly (laid down in the deed of settlement) was relaxed because of resulting "inconvenience", but the restriction on splitting shares into "fractional parts" was maintained: ibid., s 3.

  20. [410] The 1854 Act, s 4. The original limit set by the deed of settlement was £100,000.

  21. [411] This Act did not extend to Kerala (as did other Acts in this series) because, in 1854, the line had not been laid into Kerala.

  22. [412] Preamble to 18 & 19 Vict. c.xl (1855) (Madras Railway) ("the 1855 Act") being "An Act to enable the Madras Railway Company to issue and register Shares and Securities in India, and for other Purposes in relation to such Company". The Queen's Printers version of the 1855 Act describes it (in the page headings) as "The Madras Railway Act 1855".

  23. [413] Section 10 of the 1855 Act made it clear that nothing in that Act was to be taken to amend the 1852 deed of settlement, or either the 1853 or 1854 Acts, or previous powers given to either company, "save so far as such provisions may be inconsistent".

  24. [414] The 1855 Act, s 1. The directors were also empowered to make regulations to facilitate the transaction process. The earlier powers referred to in section 1 related only to Great Britain. By section 2 the directors were authorised to appoint officials to the India office or offices to handle the shares issue (and to prepare an official seal for use in lieu of the common seal) and to delegate to them all "necessary or expedient" powers for that purpose subject to compliance with regulations relating to "conduct, government, and management". Section 8 of the Act relaxed the need for formal certification of annexing of the company seal where it was affixed in accordance with a board resolution.

  25. [415] The 1855 Act, s 3. The India registers were to include those relating to shareholders, consolidated stock, transfers, mortgages and bonds, and debentures, and the entries were "from time to time" to be copied to the "principal office" in London: ibid. Securities were only to be registered at one office at a time, and they could be transferred between London and India offices at the option of, and on notice by, the relevant holder: ibid., ss 4, 5. Section 6 set down deeming provisions relating to the law (Indian or English) applicable to shareholdings.

  26. [416] The 1855 Act, s 7. The purpose of section 7 was to put beyond doubt the extent to which the directors could issue debentures convertible into shares under the deed of settlement provisions. The ceiling was the amount of the unpaid-up capital of the railway company, but subject also to prior agreement with the East India Company.

  27. [417] The 1855 Act, s 9. The agreement with the East India Company had specified that, as soon as the railway undertaking became profitable, the net profits would be applied towards interest currently payable by the East India Company (which had been guaranteed at the rate of 5% p.a. on the extension capital of £0.5 million).

  28. [418] The East India Company was formally dissolved in 1874. The Secretary of State in Council of India took over responsibility for the company's governmental actions in September 1858 pursuant to 21 & 22 Vict. c.106 (1858), being "An Act for the better Government of India".

  29. [419] Including the telegraph system, all engines and carriages, and all plant and machinery. The various contracts from 1852 to 1901 were listed in schedule C to the 1908 Act (see below).

  30. [420] Preamble to the Madras Railway Annuities Act 1908 (8 Edw.7 c.iii) ("the 1908 Act"). "His Majesty" in this context was King Edward 7. The short title of the 1908 Act was assigned by section 1. The long title was given as "An Act to provide for the creation and management of the Madras Railway Annuities and for other purposes".

  31. [421] The various debentures were listed in schedule A to the 1908 Act and totalled in value £2,144,800. Prior to transfer, the company (with moneys provided by the Secretary of State) had paid off the debenture capital and interest falling due on 1 January 1908 (capital value £134,700).

  32. [422] These funds were: the Madras Railway Provident Institution fund, the fine fund (from which occasional charitable grants were made), an employees guarantee fund, and a contractors security fund.

  33. [423] The 1908 Act, preamble.

  34. [424] The 1908 Act, preamble. The annuity instalment payments were to be made twice-yearly, starting in April 1908. The annuity was linked to the residue of a 99 year term which first started running in 1857 (probably under a contract made in December 1855, and supplemented in January 1871, pursuant to the 1853 Act, s 7: see above).

  35. [425] The 1908 Act, preamble.

  36. [426] The Secretary of State also wanted to purchase a portion of the newly-created railway annuities using up to £1.5 million fully paid-up capital stock of the Madras and Southern Mahratta Railway Co. Ltd., so as to help him meet "the sums which he became liable to pay as aforesaid": the 1908 Act, preamble.

  37. [427] The 1908 Act contained a general saving whereby no previous Acts in the series were to be deemed amended or repealed unless expressly stated: the 1908 Act, s 74. The costs of promoting and securing the Act were to be borne from the closing profits of the railway company or (failing that) by the Secretary of State "out of the revenues of India": ibid., s 75.

  38. [428] The 1908 Act, s 4. The assets included the four funds referred to above (which were to continue being held in trust), and "the estate and interest of the [railway] company in their leasehold premises at Broad Street Place in the city of London", but excluded property described in schedule B to the 1908 Act (which property was to "remain at the disposal of the board"): ibid., ss 4, 5. On transfer of the various funds, the railway company's liability for contractual and other obligations was to cease (and it would instead pass to the Secretary of State): ibid., s 6. Likewise, the Secretary of State would be required to indemnify the company against all obligations flowing from the Broad Street Place leasehold premises and all debts and liabilities previously incurred by the company with express sanction: ibid., s 9.

  39. [429] The 1908 Act, s 7. The Secretary of State's liability to pay the annuity was to be unaffected by the passing of the Act.

  40. [430] The 1908 Act, s 8. Post-transfer costs and expenses incurred by the railway company in making up the company accounts, and in paying off moneys due, were to "be treated as working charges" and "dealt with accordingly": ibid., s 10.

  41. [431] The 1908 Act, ss 11, 13. The purchase was made pursuant to the January 1871 contract. The annuity was to be charged on "the revenues of India in like manner as other liabilities incurred on account of the government of India": ibid., s 12, and the annuity trustees were to hold the moneys "for the purpose of distribution" in due course to the former holders of "old stock": ibid., s 14. The names of the holders of "old stock" were to be transferred to the registers of annuitants: ibid., s 16.

  42. [432] The 1908 Act, s 17. Class A annuitants were to be those who elected to receive their annuities in full (without recourse to the sinking fund); Class B were those who opted (or who had been deemed to opt) for annuities less a regular deduction to be contributed to the sinking fund. Registers were to be maintained for each class of annuitant and, once registered, annuitants could not ordinarily transfer between classes. However, if Class A annuitants later paid over the arrears of sinking fund deductions plus compound interest thereon, they could then transfer their holdings from Class A to Class B, although not vice versa: ibid., ss 18, 24 and 25. Prior to issue of annuity certificates, the relevant certificates of "old stock" had to be tendered for cancellation: ibid., s 19. Similarly, where transfer was made from Class A to Class B, the Class A certificates had to be tendered and replaced: ibid., s 26. All transfers had to "be by deed duly stamped", and entered in a register of transfers: ibid., ss 29, 30. Sections 31-35, 44 laid down miscellaneous arrangements relating to transfers in consequence of death, bankruptcy and marriage, to annuity holdings held in trust, and to forged transfers.

  43. [433] The 1908 Act, ss 20, 21. The deduction by the annuity trustees was to be at the rate of 52/240ths of each annuity payment, and the accruing capital sum was to be invested by "trustees of the sinking fund" in investments authorised under the Trustee Act 1893, or any replacement legislation. The annuity trustees were required twice-yearly to publish in the London Gazette and in "at least one London daily newspaper" a statement of the moneys invested: ibid., s 21.

  44. [434] The 1908 Act, ss 22, 23. The sinking fund trustees were entitled to deduct authorised expenses from the receipts. If, when the annuity trustees had distributed the fund, any portion should remain unclaimed, that portion was to be paid to the Secretary of State for him to hold "subject to the claim of any person entitled thereto": ibid., s 23 (which section was later repealed by the Madras Railway Annuities Act 1922, s 2(2) - see below).

  45. [435] The 1908 Act, ss 28, 36-43. The provisions covered annuity trustees' appointment, qualification, meetings and minutes. By section 60 (and as later amended by the Madras Railway Annuities Act 1922, s 3), the annuity trustees were authorised to make half-yearly deductions from the annuity distribution to cover their management expenses.

  46. [436] The 1908 Act, ss 45-55. Meetings of annuitants were to be convened at least annually, preceded by public advertisement (and held with a quorum of three). Voting rights were to be dependent upon the size of individual holdings, and provision was made for proxy voting.

  47. [437] The 1908 Act, ss 56-59. In essence, private trustees were able to accept and hold annuities in lieu of railway company stock as authorised investments (and on similar terms), but the annuity trustees were not to "be bound or be at liberty to take notice of" anything relating to the private trust: ibid., s 58.

  48. [438] The 1908 Act, s 62. These various amounts were to be paid over to the Secretary of State, to be held by him pending valid claims: ibid., s 65. Likewise, in respect of unclaimed stock, the Secretary of State was entitled to suspend payment of the annuities to the annuity trustees; and where previous annuity payments remained unclaimed for 10 years, or by July 1956, the annuity trustees were required to pay over the amounts to the Secretary of State (less the percentage due to the Class B sinking fund). Once the sinking fund matured, the Secretary of State would be entitled to a part of it in proportion to the Class B annuities he then held: ibid., s 63. Sections 64-68 of the Act laid down arrangements for the Secretary of State to indemnify the annuity trustees in respect of the suspended payments, for the establishing of valid claims and revival of annuity payments, and for court intervention in cases of doubt.

  49. [439] The 1908 Act, ss 69-71. If the Secretary of State were to choose to withhold contributions he would not then to be entitled to any share of the matured fund in 1956.

  50. [440] The 1908 Act, s 72. The "separate fund account" was to be frozen in accordance with schedule B to the 1908 Act. By section 73 the company was to be deemed to "be dissolved" formally once the distributions had been made or, at latest, by 30 June 1909 (pending which event the board would remain in being).

  51. [441] The annuity fund was to be distributed regularly pro rata to the annuitants who had been the owners of the railway company's "old stock": the 1922 Act, preamble. The annuitants had been divided into two classes - Class A and Class B. Class B annuitants were also entitled to share eventually in the proceeds of a separate "sinking fund" which had been created by deduction from their annuity payments.

  52. [442] The 1922 Act, preamble. The 1908 Act had made provision for the annuity trustees to be remunerated for "the payment and management of the said annuities" (the remuneration formula for which also needed adjusting), but had not made any provision for this end-stage process.

  53. [443] The cost of obtaining the Act was to be borne by the "contingent fund" (standing at just under £4,720 invested in War Stock), which had been formed under the 1908 Act, s72(d) from surplus profits and other property: the 1922 Act, preamble and s 4.

  54. [444] The 1922 Act, s 2. The section included two provisos: (a) that the Secretary of State should not be entitled to share in the annuities distribution, and (b) that, if at the date of distribution there should be portions of the fund unclaimed, the annuity trustees should pay those portions to the Secretary of State to hold pending valid claims. The effect of these various provisions rendered section 23 of the 1908 Act nugatory and, accordingly, by the 1922 Act, s 2(2) the original provision was repealed.

  55. [445] The 1922 Act, s 3. The section deleted nine words in the 1908 Act, s 60 and substituted a revised formula which (in essence) doubled the remuneration deduction from ½% to 1%.

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