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

Great Indian Peninsular Railway

Acts Covered: 12 & 13 Vict. c.lxxxiii (1849) (Great Indian Peninsula Railway Company)
17 & 18 Vict. c.xliv (1854) (Great Indian Peninsula Railway Company)
Great Indian Peninsula Railway Purchase Act 1900 (63 & 64 Vict. c.cxxxviii)
Great Indian Peninsula Railway Annuities Act 1927 (17 & 18 Geo.5 c.v)

Background

1. The Great Indian Peninsula Railway Company was incorporated in Britain, by Act of Parliament in August 1849. The company contracted with the Indian government to build a number of railway lines in Western India in return for a 5% guaranteed return on the capital invested.

2. Work commenced in October 1850. After a lengthy survey process and period of construction, the first train ran in India from Mumbai (formerly Bombay) to Thane on 1 May 1854.[277] It had twelve carriages, pulled by three engines. Construction progressed over the following years, and the Great Indian Peninsula Railway network increased significantly.[278]

3. Under the terms of the original guarantee agreement, the Indian government had an option to purchase the lines and the company. The company was purchased by the Indian government in 1900, and all contracts were determined. The Great Indian Peninsula Railway Company was reconstituted as an entirely state-owned enterprise. The Indian government merged the Great Indian Peninsula Railway network with the Indian Midland Railway network in 1900, and the new stateowned company managed the amalgamated lines.

4. It is not clear whether (or exactly when) the Great Indian Peninsula Railway Company was formally dissolved. It is clear, however, that the company has no current or continuing involvement in the management or development of railways in India. The records of the Board of Trade do not indicate that the company was ever dissolved, nor have any notices been published in the London Gazette to that effect.[279] The probability is that it ceased to exist in, or shortly after, 1900. The railway company is no longer registered at Companies House as an active company, nor are there any indications that it remains in existence.

5. Five Acts relating to the Great Indian Peninsula Railway Company were promoted over the lifetime of the company: Great Indian Peninsula Railway Company Act 1849 Great Indian Peninsula Railway Company Act 1854 Great Indian Peninsula Railway Purchase Act 1900 East India Loan (Great Indian Peninsula Railway Debentures) Act 1901 Great Indian Peninsula Railway Annuities Act 1927. The 1901 Act was repealed in full by the East India Loans Act 1937, and the remaining four Acts are proposed for repeal in the following note.

12 & 13 Vict. c.lxxxiii (1849) (Great Indian Peninsula Railway Company) - Purpose

6. Pursuant to a deed of settlement made in April 1849, various named individuals had formed and registered the Great Indian Peninsula Railway Company (in accordance with the joint stock companies legislation[280]) for the purpose of "establishing railway communication between Bombay and other parts of India on such terms and conditions as may be agreed upon by the said railway company and the East India Company".[281] The company's capital was capped at £500,000, with a power to double that figure in limited circumstances.[282]

7. By the summer of 1849, negotiations between the railway company and the East India Company were "still in progress" on the terms and conditions for the joint project, albeit that "in some respects" what had been envisaged earlier in the year had now varied. Given this situation, and the need to have at its disposal a range of powers with legislative force, the company decided to seek statutory incorporation. To this end it promoted what was to become the 1849 Act.

8. There were several purposes of the 1849 Act. In broad terms they were:

(a) to authorise the incorporation of the railway company so as to enable it to construct and operate "such railway or railways in the East Indies" together with such ancillary extension and branch lines as may be agreed between the project partners;[283]

(b) to vest automatically in the railway company all land, property and documentation as was presently held on its behalf, and to make it responsible for all existing contractual and other liabilities relating to the undertaking;[284]

(c) to authorise the railway company to enter into contracts with the East India Company ("on account of the Government of India") for building and maintaining railways, and allied telegraphs, through India - the first of which would be a line from Bombay to Callian[285] - and to secure to the East India Company various rights;[286]

(d) to authorise the raising of initial capital for the railway company,[287] and the borrowing by the company of additional moneys;[288]

(e) to require the holding of railway company meetings half-yearly, and to fix the number of directors;[289] and

(f) to authorise the railway company to agree with the East India Company that its capital be extended to £1 million so that it may "be enabled to make any railway or railways of greater extent" than the initial line.[290]

Status of the 1849 Act

9. The function of the 1849 Act was to incorporate the Great Indian Peninsula Railway Company as a formal statutory entity, to establish the body's constitution and to give it powers both to enter into contracts and to raise capital moneys for its construction project. The quasi-governmental East India Company was made integral to the railway company's viability and operation.

10. The 1849 Act was the first in a series of local Acts which spanned the period 1849 to 1927. Section 7 of the 1849 Act was repealed by subsequent railway legislation enacted in 1854 (see below).[291]

11. The Great Indian Peninsula Railway Company survived until about 1900 when - in all probability - it was dissolved. The East India Company was dissolved in 1874, although some of its functions continued to be fulfilled by the then government of India.

12. The 1849 Act is now spent and may be repealed in whole.

Extent

13. The 1849 Act related principally to the affairs of the Great Indian Peninsula Railway Company. That company operated in India and in Great Britain, with its head office based in London.

14. The Act applied to Great Britain, India (in the states of Maharashtra, Gujarat and Rajasthan) and Pakistan.

17 & 18 Vict. c.xliv (1854) (Great Indian Peninsula Railway Company) - Purpose

15. In August 1849, the Great Indian Peninsula Railway Company contracted with the East India Company to construct and work a railway line from Bombay to Callian, and to pay to the East India Company its full working capital of £0.5 million, which the latter would hold for the project. Once the railway was completed, the railway company would take a lease of it for a 99 year term ("determinable by surrender or purchase"), and in return for operating the railway facility the East India Company would pay the railway company half-yearly interest (at 5% p.a.) on the initial capital sum, funded in part from the receipts generated by the line.[292]

16. The East India Company was given options under the 1849 agreement: (a) to purchase the railway and infrastructure and rolling stock, exercisable on expiry of 25 years and of 50 years, at a market valuation, and (b) to pay the purchase price by commuted annuity, spread over the remainder of the original 99 year term, rather than by lump sum.[293]

17. The 1849 agreement was adjusted by the parties in 1853 so as to allow the railway company to build an extension of the line on to Shawpoor (now Shahpur), and to vary the financial arrangements, including doubling the share capital.[294] By 1854, further contracts for the construction of "other extensions of their railways [were] in contemplation".[295] By this stage it was felt that a mechanism needed to be put in place, whereby the interest payments guaranteed by the East India Company on the capital sums raised should be "specifically appropriated and attached" both to the sums raised and to the shares issued, and that the railways' net receipts should be used "to equalise the different rates of interest" (with the balance being divided amongst the shareholders).[296]

18. To this end, the railway company promoted what was to become the 1854 Act.[297] In broad terms its purpose was:

(a) to authorise the railway company to launch a new share issue in a new class (each share to have a maximum value of £20, increased from the original £5 per share)[298] and to reclassify existing shares;[299]

(b) to require the railway company to assign "a distinctive mark or title" to all new contracts with the East India Company and to all shares issued to create capital to support such initiatives;[300]

(c) to provide for the application of net profits and net receipts in the hands of the railway company;[301]

(d) to require the railway company, on any exercise of the purchase option,[302] to apportion amongst its shareholders the acquisition price;[303]

(e) to regulate calls on shares;[304] and

(f) to prescribe the quorum for meetings of directors of the railway company.[305]

Status of the 1854 Act

19. The 1854 Act was designed with limited objects in mind. In particular, it was needed to create and regulate a new share issue (to facilitate the railway company's expansion plans), and to set out the rubric for distribution of moneys on a future purchase of the railway undertaking by the East India Company. The 1854 Act and its predecessor Act of 1849 were to be read and construed in tandem. The 1854 Act repealed a small portion of the 1849 Act.

20. The 1854 Act was the second in a series of four Acts relating to the Great Indian Peninsula Railway Company.

21. The Great Indian Peninsula Railway Company was probably dissolved in or about 1900. The East India Company was dissolved in 1874, although some of its functions continued to be performed by the then Indian government.

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

Extent

23. The 1854 Act related principally to the affairs of the Great Indian Peninsula Railway Company (and, to a lesser extent, the affairs of the East India Company). The railway company operated in India and in Great Britain.

24. The Act applied to Great Britain, India (in the states of Maharashtra, Gujarat and Rajasthan) and Pakistan.

Great Indian Peninsula Railway Purchase Act 1900 (63 & 64 Vict. c.cxxxviii) - Purpose

25. In August 1899, at the 50 year break point under the original agreement of 1849, the Secretary of State in Council of India (who, for contractual purposes, was by now the successor to the East India Company)[306] had exercised his option to purchase the railway undertaking from the Great Indian Peninsula Railway Company.[307] The Secretary of State had become liable to pay in June 1900 a sum of just less than £35 million for the purchase,[308] plus the sums secured by debentures and debenture stock when they became due.[309] The Secretary of State opted to pay for the railway undertaking by annuity spread over the residue of the original 99 year term.[310]

26. Various amounts of money (in both rupees and £s sterling) were owed at this time to the railway company from several sources, including a provident fund established by the railway company (which fund was in future to be administered by the Secretary of State).[311] In order to progress the transfer of the railway undertaking a sinking fund was to be established.[312]

27. In order to facilitate the smooth transfer of the railway (and ensure that arrangements were "made for the future working of the railways of the company with or without other railways")[313], the parties sought additional powers through what was to become the 1900 Act.[314] The main purposes behind the Act were these:

(a) to authorise the transfer, on 30 June 1900, of the railways and works to the Secretary of State, together with three separate funds and the railway company's leasehold office premises, subject to the debts and liabilities already incurred, and the indemnification of the railway company by the Secretary of State for previous capital advances;[315]

(b) as from the date of transfer, to make the Secretary of State liable for the three funds;[316]

(c) to require the Secretary of State, in respect of debenture stock, to pay the interest when due and repay the principal on maturity;[317]

(d) to require the Secretary of State to put in place arrangements for payment of the purchase annuity (payable until August 1948, in lieu of a single capital sum),[318] which was then to be distributed to holders of the railway company's "old stock";[319]

(e) to authorise the creation and investment of a sinking fund by the annuity trustees so as to produce a capital sum for apportionment and distribution amongst the then-entitled Class B annuitants in August 1948,[320] and the handing to the Secretary of State of any unclaimed balance of the accumulated fund (to be held pending further claims on it);[321]

(f) to make provision for the transfer of annuitants between annuity classes;[322]

(g) to set out the rubric for the appointment, qualification and meetings of the annuity trustees,[323] and for meetings of annuitants;[324]

(h) to provide pensions for certain railway company employees, by way of compensation for loss of office;[325]

22. The sinking fund trustees were required to publish a statement of investments twiceyearly in the London Gazette and in at least one London daily newspaper.

(i) to provide protection for trustees who had originally invested trust funds in Indian Railway stock or shares underwritten by the Secretary of State;[326] and

(j) to provide for the handling of unclaimed or suspended interest or annuities,[327] and to provide a claims mechanism.[328]

Status of the 1900 Act

28. The purpose of the 1900 Act was principally to put in place the formal arrangements whereby the Secretary of State could acquire the operating assets of the Great Indian Peninsula Railway Company and a sinking fund could be created. The Secretary of State for India had taken over the contractual and other functions of the former East India Company in 1858.[329]

29. The 1900 Act remained live - at least in substantial part - until 1927 and beyond. The Great Indian Peninsula Railway Annuities Act of that year (see below) repealed sections 22, 23 and 36 of the 1900 Act (relating to aspects of the sinking fund and the annuity trustees).[330] Section 62 of the 1900 Act (relating to the formula for reimbursement of the annuities management expenses) was amended by section 5 of the 1927 Act.

30. The provisions of the 1900 Act remained of importance until 1948 when the trust for the sinking fund was wound up. Thereafter it ceased to have any practical purpose. The Great Indian Peninsula Railway Company was probably dissolved in, or shortly after, 1900.

31. The 1900 Act is now spent and may be repealed in whole.

Extent

32. The 1900 Act related principally to the affairs of the Great Indian Peninsula Railway Company and its related sinking fund. The company operated in India (in the Bombay presidency) and in Great Britain (London).

33. The Act applied to Great Britain, India (in the states of Maharashtra, Gujarat and Rajasthan) and Pakistan.

Great Indian Peninsula Railway Annuities Act 1927 (17 & 18 Geo.5 c.v) - Purpose

34. By 1927 the Secretary of State in Council of India had created an annuity of just over £1.335 million "charged on the revenues of India", in accordance with the 1900 Act (see above). The annuity was payable to the annuity trustees halfyearly until August 1948, and represented the consideration for the purchase of "railways and other works of the Great Indian Peninsula Railway Company" in lieu of payment by a single sum.[331] The annuity was to be distributed by the annuity trustees to the two classes of annuitant set up by the 1900 Act.[332]

35. By an agreement made between the Secretary of State and the railway company in December 1900 (under which the Secretary of State had effected the purchase), the railway company continued to operate the railway undertaking until June 1925, at which point it was to be "taken over by the Secretary of State".[333] By 1926, ownership of the railway undertaking had changed hands, and various practical issues had arisen. These issues (which required addressing)[334] were:

(i) whether the annuity trustees were entitled to make deductions from individual annuity payments to cover the cost of their "remuneration" in addition to the reimbursement of "the expenses of the payment and management of the said annuities"; and whether the annuity trustees should be paid an additional allowance for administering the eventual winding up of the annuity trust and of the sinking fund; (ii) how the annuity trustees were to continue to function once they had lost the joint use of "offices and staff" (shared with the railway company) for the purposes of "payment and management" of the annuities;[335] and (iii) how the annuity trustees were to retire by rotation and be replaced as occasion required.

36. To resolve these matters, the (relatively short) 1927 Act provided as follows:

(a) that section 22 of the 1900 Act be amended,[336] so that the declaration of trust of the sinking fund should include provision whereby the annuity trustees (as well as the sinking fund trustees) could reclaim their "costs charges and expenses" flowing from their contribution to the administration of the sinking fund;[337]

(b) that the sinking fund trustees be required, in August 1948, to transfer to the annuity trustees the accumulated sinking fund for apportionment and distribution amongst the then-registered Class B annuitants;[338]

(c) that the annuity trustees should retire, and be replaced, on a rotational basis (by thirds);[339] and

(d) that the necessary consequential provisions be in place.[340]

Status of the 1927 Act

37. The function of the 1927 Act was very narrow. It was to facilitate the proper management of the annuity fund which was an integral part of the sale of the railway undertaking by the Great Indian Peninsula Railway Company to the Indian government. This fund would eventually be wound up in 1948.

38. The 1927 Act supplemented (and in some respects amended) the provisions of the 1900 Act. The Act itself was the last in the series of Acts relating to this railway and was not amended by subsequent legislation.

39. The Great Indian Peninsula Railway Company survived until about 1900; at which point it was probably dissolved.

40. The 1927 Act is now spent and may be repealed in whole.

Extent

41. The 1927 Act related principally to the affairs of the annuity trust linked to the former Great Indian Peninsula Railway Company. The railway company had operated in India and in Great Britain, with its head office based in London.

42. The Act applied to Great Britain, India (in the states of Maharashtra, Gujarat and Rajasthan) and Pakistan.

Consultation

43. 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, the High Commission of Pakistan, 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. [277] The first passenger train ran on the same line on 16 April 1853.

  2. [278] For further information see, Ghosh, S. Railways in India - A Legend (2002) Jogemaya Prokashani, Kolkata, p82.

  3. [279] The records reside at the National Archives, under reference numbers BT41/268/1540, BT285/43 and BT285/793.

  4. [280] 7 & 8 Vict. c.110 (1844) ("the 1844 Companies Act").

  5. [281] Preamble to 12 & 13 Vict. c.lxxxiii (1849) ("the 1849 Act"), being "An Act to incorporate the Great Indian Peninsula Railway Company, and for other Purposes connected therewith". Establishing railway communication was to be achieved by "making, constructing, working, and maintaining" railway lines: the 1849 Act, preamble.

  6. [282] The capital was to be raised by 100,000 shares issued at £5 each: the 1849 Act, preamble.

  7. [283] The 1849 Act, s 1. The railway company was to have "perpetual succession" and a common seal, and as a legal entity was able to conduct litigation and to hold land, "including lands in Great Britain for the purpose of the business of the same company": ibid. Section 2 of the Act was an interpretation provision which defined, amongst other matters, the company's directors as "the directors of the company having the management in Great Britain of the affairs of the company".

  8. [284] The 1849 Act, s 3. To this end, the provisions of the 1844 Companies Act (above), as amended by the Companies Clauses Consolidation Act 1845 (8 & 9 Vict. c.16) ("the 1845 Companies Act"), were disapplied, as were the first 97 clauses of the deed of settlement (1849), and in their place the incorporated railway company was to be bound by the whole of the 1845 Companies Act in relation to a raft of matters including share issue and transfer, creditor remedies, conversion of borrowed money, consolidation of shares into stock, holding of general meetings, keeping of accounts, and so forth: the 1849 Act, s 4. In particular, the supreme courts of judicature in India were given jurisdiction concurrent to the English courts in actions relating to enforcement by the railway company of payment of calls on shares, and in executing judgments on behalf of creditors against resident shareholders; certain documentation was made self-producing in evidence; magistrates sitting in India were given concurrent powers relating to accountability of company officials; and company byelaws were not to be "repugnant to the laws of India". The company secretary (or treasurer) based in England was authorised to appoint an officer in India to act as attorney to represent the company in bankruptcy and insolvency matters: ibid.

  9. [285] See the 1849 Act, s 19 (discussed below).

  10. [286] The 1849 Act, s 5. The rights and provisions were to embrace (amongst other things): the application of tolls, receipts and profits; rights of supervision and direction relating to the railway company and its contracts in England as well as in India; the appointment of an ex officio director with a power of veto; the appointment and empowering of agents in India; depositing with the East India Company subscribed capital; provisions for surrender or sale of the railway or part of it; and making provision for the "eventual or contingent transfer" of the undertaking to the East India Company. All contracts to these ends were deemed to be validated by the 1849 Act, notwithstanding the possibility that they might fall beyond the bounds of the original objects of the railway company.

  11. [287] The 1849 Act, s 6. The initial capital was fixed at £0.5 million raised in £5 share units. Calls on the shares were not to exceed £1 per £5 share, and calls were not to occur except at three-monthly intervals: ibid., s 7. The railway company was given power to consolidate its shares into a lesser number and to buy back (and reissue) any portion of a holding which was not capable of being consolidated: ibid., s 9.

  12. [288] The 1849 Act, s 11. Borrowing could occur once all the capital had been subscribed by share issue (of which 50% was paid-up), and could reach a ceiling equal to one-third of the then capital. Borrowing had to be in accordance with the 1845 Companies Act, and was subject to conditions laid down by the East India Company.

  13. [289] The 1849 Act, ss 8, 14 and 15. Initially, nine directors were to be appointed, drawn from the original directors (in time this number could be varied from 8 to 19). The initial chairman and deputy would be the existing office-holders: ibid., s 17. Each director appointed had to hold a minimum of 50 shares: ibid., s 16. The quorum for shareholder meetings was to be 20 (holding 2% of the company's capital): ibid., s 12. Shareholders resident outside the United Kingdom were to be entitled to appoint proxies to attend and vote at meetings within the UK (subject to the instrument of proxy being lodged in advance with the company secretary, and each proxy representing no more than 20 shareholders): ibid., s 13. Meetings were to be advertised in a daily paper published "in London or Middlesex": ibid., s 18.

  14. [290] The 1849 Act, s 19. The ability to create additional capital up to the £1 million ceiling was given as of right. If further capital was required over and above that figure, the railway company was empowered to increase it "to any amount", subject to obtaining sanction from the East India Company on the grounds that it was "proper and desirable, having regard to the extent of the undertakings" upon which the company had embarked: ibid. All increases in capital were to be created through share issue or a capital stock issue in accordance with the 1845 Companies Act.

  15. [291] See 17 & 18 Vict. c.xliv (1854), s 10.

  16. [292] The complex funding arrangements were set out in detail in the preamble to 17 & 18 Vict. c.xliv (1854) ("the 1854 Act"), being "An Act to amend the [1849] Act incorporating the Great Indian Peninsula Railway Company, and for other Purposes connected therewith".

  17. [293] The 1854 Act, preamble.

  18. [294] The 1854 Act, preamble. The original capital raised by share issue was £0.5 million; this was increased by a further issue, bringing the total to £1 million.

  19. [295] The 1854 Act, preamble.

  20. [296] The 1854 Act, preamble. This needed to be underpinned by new legislation, which would also amend some provisions in the previous 1849 Act.

  21. [297] The remit of the 1854 Act was tightly drawn. Section 13 specifically limited the Act's operation so that it should not affect any other contracts with the East India Company or the non-related provisions in the 1849 Act. The 1849 and 1854 Acts were to be read together as one. The costs of obtaining the 1854 Act were to be borne by the railway company (through its capital stock): the 1854 Act, s 14.

  22. [298] The 1854 Act, s 9.

  23. [299] The 1854 Act, s 2. Previously issued shares (and consolidated stock) were to be shown in the company's books as "the original or experimental shares". Holders of these original or experimental shares were to be entitled to receive interest from the East India Company only at the previously prescribed contractual rate: ibid., s 3. All new shareholders were to be entitled to interest at the new rate (as shown on the new share certificates (see below)), and were not to receive any interest from the East India Company under any other contract: ibid., s 5.

  24. [300] The 1854 Act, s 4. The share certificates were to bear this distinguishing feature and to state the rate of interest guaranteed.

  25. [301] The 1854 Act, ss 6, 7. Net profits flowing from contracts with the East India Company were to be deemed to be interest payments payable by that company; and surplus net receipts were to "be appropriated" towards making up the interest payable to new shareholders as part of the interest "equalisation" exercise, with any remaining balance being divided amongst the shareholders as "dividend": ibid.

  26. [302] Under the 1849 agreement (above), the East India Company had acquired the right to exercise an option to purchase the whole of the railway undertaking.

  27. [303] The 1854 Act, s 8. Apportionment (of either the lump sum or the annuity) was to be based on the market value of shares held by each shareholder.

  28. [304] The 1854 Act, ss 10, 11. No call was to exceed £2 per issued share, and the timing and amounts of subsequent calls were restricted: ibid., s 11. Section 10 of the 1854 Act specifically repealed the 1849 Act, s 7 (see above) which then governed call arrangements, although that repeal was not to prejudice payments due on calls made prior to June 1854.

  29. [305] The 1854 Act, s 12.

  30. [306] Including the 1849 agreement, there had been 22 contracts executed with the Great Indian Peninsula Railway Company.

  31. [307] As recited in the preamble to the Great Indian Peninsula Railway Purchase Act 1900 (63 & 64 Vict. c.cxxxviii) ("the 1900 Act"), being "An Act to provide for the vesting of the railways and other property of the Great Indian Peninsula Railway Company in the Secretary of State in Council of India and for other purposes". The short title of the 1900 Act was assigned by section 1. The railway undertaking to be purchased included "the railways and works constructed under the said contracts together with the telegraphs and the engines carriages stock plant and machinery belonging to the railways and works". However, the acquisition excluded the funds mentioned in Schedule B to the 1900 Act: ibid., preamble.

  32. [308] The exact figure was £34,859,217 17s 6d.

  33. [309] The irredeemable debenture stock was valued at £2,701,450 and the various debentures totalled £3,220,900: see the 1900 Act, preamble and Sch A. In addition to being liable for these sums, the Secretary of State was responsible for indemnification against all interest due on the securities. By the East India Loan (Great Indian Peninsula Railway Debentures) Act 1901 (c.25) (later repealed by the East India Loans Act 1937, c.14), the Secretary of State was empowered to raise the £3,220,900 (by borrowings charged on the "revenues of India": ibid., ss 3-5) in order to discharge the debentures when redemption was due. The debentures were recited in the 1901 Act in the preamble and specified in the schedule. The list of debentures in the schedule matched that in the 1900 Act, Sch A.

  34. [310] The Secretary of State had the option (set out in the 1849 agreement) of making payment either by paying the "gross sum of money" on 30 June 1900 or by paying through an annuity. He chose the latter route. The annuity term would expire in 1948, and the rate of interest was to be determined in accordance with the 1849 contract: the 1900 Act, preamble.

  35. [311] These amounts included a sum in the "Fine Fund" (from which occasional charitable grants were made), and sums in the "Mutual Assurance Fund" and the "Separate Fund": the 1900 Act, preamble.

  36. [312] The 1900 Act, preamble. The sinking fund would allow the various stockholders to exchange their stock for annuities (with or without a sinking fund attached, at their option). The existing stock registers would be closed and provision would be made for registration and management of the new annuities.

  37. [313] The 1900 Act, preamble. Under the 1900 Act the railway company was given additional power to enter into contracts with the Secretary of State for various purposes, including (a) "the maintenance and management of the Great Indian Peninsula Railway or any other railways in India or any part thereof", (b) improving and extending the rail network (including "constructing deviation or auxiliary railways"), (c) working such railways, (d) granting reciprocal running powers, and (e) raising moneys by stock or shares (up to £2.575 million) or by debentures or debenture stock: the 1900 Act, s 72. Where new shares or stock were issued by the company, those new holders were to exercise all the relevant powers of the company "to the exclusion of" all existing holders and all annuitants (of either class: see below): ibid., s 73.

  38. [314] The cost of obtaining the 1900 Act was to be borne principally by the railway company from the surplus profits and, failing that, by the Secretary of State "out of the revenues of India": the 1900 Act, s 76.

  39. [315] The 1900 Act, s 4. The "railways and works" were those constructed under the 22 contracts recited in Sch C to the Act. The three funds transferred were the fine fund, the provident fund, and the mutual assurance fund. The company's leasehold premises were sited at Copthall Avenue in the City of London (and the Secretary of State was specifically required, on transfer, to indemnify the railway company against all liabilities in respect of those premises: ibid., s 9). Two funds recited in Sch B to the Act (the separate fund and the fire insurance fund) were specifically excluded from the sale transfer. All existing contracts between the railway company and the government were terminated, save for provisions relating to the issue and guarantee of debentures, debenture stock or interest payable thereon: ibid., s 7. The surplus profits and the Sch B property were to be distributed by the railway company "forthwith" (after 30 June 1900) proportionately to the then-registered stockholders: ibid., s 71.

  40. [316] The 1900 Act, ss 5, 6. The three funds were the fine fund, the provident fund, and the mutual assurance fund. Part of the fine fund had previously been transferred by the railway company to the provident fund as "an accretion" to the latter. The moneys which were held in the "separate fund account" were to remain "at the disposal of" the railway company board, untransferred.

  41. [317] The 1900 Act, s 8.

  42. [318] The 1900 Act, ss 10-12. The annuity (in place of paying a lump sum of almost £34.86 million) was to be "charged on and payable out of the revenues of India in like manner as other liabilities incurred on account of the Government of India": ibid., s 11. It was to be paid half-yearly to trustees based in London, who would then make the distribution to the annuitants (after deducting the authorised management expenses): ibid., s 20. The annuity trustees were required to appoint a secretary and other officers to assist them in their duties: ibid., s 28.

  43. [319] The 1900 Act, s 13. The annuities were to be given to the owners either of stock which existed at the time of passing of the 1900 Act, or of annuities which represented that "old stock": ibid. The valuation of each owner's annuity entitlement would be undertaken on the closing of the stock registers in both London and Bombay from April 1900, and the appropriate valuation would be entered in the new registers of annuitants, for both Class A and Class B annuitants. (Class B annuitants were those who opted, or who were deemed to have opted, to pay part of their annuity into a sinking fund): ibid., ss 15, 16 and 18. The annuity trustees would pay the annuitants the appropriate level of annuity on a half-yearly basis: ibid., s 20.

  44. [320] The 1900 Act, s 21. The sinking fund was to be produced by deduction of annuity amounts due to Class B annuitants, and vested by the trustees in special "trustees of the sinking fund" for investment in authorised securities (in accordance with the Trustee Act 1893): ibid., ss 21,

  45. [321] The 1900 Act, s 23.

  46. [322] The 1900 Act, s 24. Class A annuitants could at any time request transfer to Class B status on making payment of contribution arrears (plus compound interest) due to the sinking fund. On transfer (to be by deed in prescribed form, or exceptionally by declaration, and then duly registered), the annuity trustees were obliged to invest the moneys in the authorised manner, and to issue a new certificate of holding: ibid., ss 25-26, 29-30, and 32-33. The trustees were not obliged to look behind any annuity holding to ascertain whether it was held in trust: ibid., ss 34, 35. Annuitants (of either class) were also able to exchange their annuity holdings for new share issues by the railway company: ibid., s 74.

  47. [323] The 1900 Act, ss 36-43. Each annuity trustee had himself to be the holder of at least £50 worth of annuities. The chairmanship was to rotate every 12 months. All proceedings of the trustees were to be minuted, and the minute books retained. The annuity trustees were entitled to deduct up to 1d. in the £ (ie. a 1/240th proportion) from the half-yearly annuity payments to annuitants in order to cover "the expenses of the payment and management of the said annuities": ibid., s 62. The provision in section 62 was later amended by the Great Indian Peninsula Railway Annuities Act 1927, s 5 (see below) which increased the rate of authorised deduction.

  48. [324] The 1900 Act, ss 45-55. Meetings of annuitants were to be convened at least once a year (with provision for the calling of additional meetings). In order to be quorate, meetings had to comprise at least 20 annuitant members, and meetings would ordinarily be chaired by the chairman of the annuity trustees. The Act also provided for the voting capability of each annuitant (including joint annuitants) and proxy voting (on the lines of the Companies Clauses Acts 1845 and 1888).

  49. [325] The 1900 Act, ss 56, 57. Seven salaried individuals with more than 10 years service (named in Sch D to the Act) were to receive pensions, calculated on a sliding scale, drawn from the annuity payable by the Secretary of State under the 1849 contract.

  50. [326] The1900 Act, ss 58-61. Trustees who had made such investment were entitled to accept Class B annuities (created under the 1849 contract) in lieu of the original investment holding. The transfer of a holding was not to affect the rights accorded to any beneficiaries under a trust or settlement or will. Likewise, the annuity trustees were not to be affected by any trust or lien attached to any holding, and were entitled to treat the registered proprietor of stock as its absolute owner.

  51. [327] The 1900 Act, ss 64-67. The railway company was required to hand over to the Secretary of State any unclaimed interest, dividends and surplus profits from shares, stock, and debentures or debenture stock, and unclaimed moneys previously advanced by the Secretary of State "for the repayment of principal sums secured by any debentures", in return for which the Secretary of State would indemnify the company in respect of any claims arising from these moneys: ibid., s 64. Where stock was unclaimed, the Secretary of State was entitled to suspend payment to the annuity trustees of the annuities "representing the same", and if annuities were to remain unclaimed for 10 years they would be refundable to the Secretary of State, less any Class B sinking fund and pension deductions (but subject to the Secretary of State providing indemnification to the trustees for any claim relating to the suspended and repaid annuities): ibid., ss 65-67.

  52. [328] The 1900 Act, ss 68-70. Where a claimant could establish his right to repaid moneys or to unclaimed annuities or to unclaimed interest, dividends and surplus profits (or the like) "to the satisfaction of the Secretary of State", and had advertised the making of claim, the Secretary of State was then obliged to pay out the relevant moneys and, in the case of annuities, to revive the annuity payments to the annuity trustees: ibid., s 68. Where a claim was not accepted, the claimant had the right to make application to the High Court for an entitlement order. Likewise, additional claimants could make court application challenging any previous payment decision.

  53. [329] See Government of India Act 1858 (21 & 22 Vict. c.106).

  54. [330] See Great Indian Peninsula Railway Annuities Act 1927 (17 & 18 Geo.5 c.v) ("the 1927 Act"), s 9.

  55. [331] Preamble to the Great Indian Peninsula Railway Annuities Act 1927 (17 & 18 Geo.5 c.v) ("the 1927 Act") being "An Act to amend the Great Indian Peninsula Railway Purchase Act 1900 and for other purposes". The short title of the 1927 Act was assigned by section 1 (and by that section the 1900 and the 1927 Acts were capable of being cited together as "the Great Indian Peninsula Railway Annuities Act 1900 and 1927").

  56. [332] See the 1900 Act, s 16 which established the two classes of annuitant (Classes A and B). Only the Class B annuitants had elected to contribute towards the sinking fund. The fund was vested in special trustees who would, in August 1948 via the annuity trustees, realise, apportion and distribute the accumulated amount amongst the then-registered Class B annuitants (less the charges and expenses incurred by the sinking fund trustees).

  57. [333] The 1927 Act, preamble.

  58. [334] The annuitants resolved in December 1926 that the annuity trustees be empowered to promote and pay for a Bill (which became the 1927 Act) to provide the necessary legislative authorisations: the 1927 Act, preamble.

  59. [335] The consequence of losing these facilities (which they had "hitherto enjoyed") was that the expenses of administration had increased and the formula for reimbursement of those expenses - and the actual level of reimbursement - had become inadequate: the 1927 Act, preamble.

  60. [336] By repeal of, and substitution for, the former section 22: the 1927 Act, s 2.

  61. [337] The 1927 Act, s 2. The authorised rate of expense reimbursement for the annuity trustees (originally set out in the 1900 Act, s 62) was amended and uplifted by the 1927 Act, s 5 from 1d. in the £ to 1£d. in the £. Thereafter, section 62 of the 1900 Act and section 5 of the 1927 Act were to be "read and construed" together. The section 62 deductions were to be applied, first, towards paying the various expenses and, secondly, towards paying annual "remuneration" to the annuity trustees from April 1926: the 1927 Act, s 6.

  62. [338] The 1927 Act, s 3. The annuity trustees were authorised first to deduct from the moneys their expenses incurred in the distribution, and in the winding-up, of the trust fund. Any portion of the fund remaining unclaimed on 17 August 1948 was to be paid over to the Secretary of State to be held, pending receipt of a valid claim: ibid.

  63. [339] The 1927 Act, s 4. Provision was also made for the filling of casual vacancies.

  64. [340] Thus, the 1927 Act provided for: the legitimising of previous deductions by the annuity trustees (s 7); a saving for the Indian Railway Annuities (Sinking Funds) Act 1909, s 6 (s 8); the repeal of sections 22, 23 and 36 of the 1900 Act (see above) (s 9); and the payment by the annuity trustees of the costs of promoting and obtaining the 1927 Act (s 10).

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