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 Southern of India Railway Co. and South Indian Railway Co.

Acts Covered: Great Southern of India Railway Act 1858 (21 & 22 Vict. c.cxxxviii)
Great Southern of India Railway Amendment Act 1860 (23 & 24 Vict. c.xlix)
South Indian Railway Act 1874 (37 & 38 Vict. c.cxii)
South Indian Railway (Additional Powers) Act 1888 (51 & 52 Vict. c.v)

Background

1. The Great Southern of India Railway Company was incorporated in Britain in 1858. The company received a guarantee from the Secretary of State for India for a 5% return on £500,000 which was to be used to construct a railway line from Nagapattinam (formerly Negapatam) to Tiruchirapalli (formerly Trichinopoly), along with several branch lines.

2. The company's guarantee was given amidst political controversy. Lord Stanley[341] took over from Sir Charles Wood[342] as Secretary of State for India, whereupon he reversed his predecessor's policy, and starting granting guarantees to the smaller branch line railway companies. The Great Southern of India Railway Company was one of the first companies to benefit. Construction began on the line shortly after the company's incorporation, and by 1860, the Nagapattinam to Tiruchirapalli line was nearing completion. [343]

3. An Act of 1874 created the South Indian Railway Company through the amalgamation of the Great Southern of India Railway Company and the MG Carnatic Railway Company.[344] Both companies were dissolved on the date the Act came into force. [345] The new company was incorporated by Act of Parliament. The company contracted with the Secretary of State for India to build a railway line running between Chennai (formerly Madras) and Thanjavur (formerly Tanjore).

4. The South Indian Railway Company took over the responsibilities of both the original companies and construction continued unabated. A considerable number of additional lines were opened in the following decade, including the line between Cuddalore and Thanjavur via Chennai.

5. In 1891, the South Indian Railway Company's contract expired and the state purchased all the lines.[346] In October 1890, a notice was published in the London Gazette indicating the company's intention to distribute the earnings from the government's imminent purchase of the railway lines amongst its directors and registered proprietors.[347]

6. The South Indian Railway Company went into voluntary liquidation. The process commenced on 4 April 1944. The final winding-up meeting was held on 23 September 1948, and a return was made under section 290 of the Companies Act 1948. The company was represented by Freshfields, Leese and Munns.[348]

7. Four Acts relating to the Great Southern of India Railway Company and the South Indian Railway Company were promoted over the lifetime of the companies. Great Southern of India Railway Act 1858 Great Southern of India Railway Amendment Act 1860 South Indian Railway Act 1874 South Indian Railway (Additional Powers) Act 1888. All of these Acts are proposed for repeal in the following note.

Great Southern of India Railway Act 1858 (21 & 22 Vict. c.cxxxviii) - Purpose

8. Shortly after 1856, when joint stock companies legislation had been enacted, the Great Southern of India Railway Company (Limited) was formed. Its function was to afford "railway communication to the provinces of Southern India, including, among other places, Salem, Trinchinopoly [now Tiruchirapalli], Tangore [now Thanjavur], Majore, Madura [now Madurai], Tinnivelly [now Tirunelveli], Tutacorin [Thoothukudi], Travencore [now part of the Kerala region], and such other places as the said company might from time to time determine".[349] The railway company's registered office was based in England, and the company's initial capital was to be £1 million (in 50,000 shares).

9. In order to fulfil the project the railway company was empowered to borrow additional moneys. The East India Company had "sanctioned a guarantee of interest" on such borrowings, but statutory authorisation was required both to incorporate the company and to provide other powers.[350] To this end the 1858 Act was promoted and obtained. The Act's principal purposes were these:

(a) to incorporate the railway company (with a principal office in London),[351] and to transfer the shareholdings from the original company to the new company;[352]

(b) to restate the objects of the railway company, to authorise the holding of land in England (up to "one rood"[353] in size), and to authorise the automatic transfer of all property held by the former company to the new body;[354]

(c) to disapply the provisions of the Joint Stock Companies Acts 1856 and 1857, but to incorporate within the 1858 Act the Companies Clauses Consolidation Act 1845;[355]

(d) to authorise the railway company to enter into contracts with the East India Company, "on account of the Government of India", to facilitate the railway company's objects, including "the making of surveys and preliminary arrangements for any works, railways, tramways, and other means of transit"; and to enable the East India Company to guarantee interest on the railway company's "capital and loan";[356]

8. By section 3 the memorandum and articles of association of the original company were to cease to have effect, but by sections 4 to 7 there were savings for previous actions by the original company, including for contracts entered into, legal proceedings commenced and debts due. Shareholders in the original company were automatically to become registered shareholders to the same value in the replacement company: ibid., s 16.

(e) to provide for the holding of general meetings of the railway company's shareholders, and for the functioning of directors and auditors;[357]

(f) to authorise the railway company to borrow (on mortgage or bond) additional capital moneys, subject to such conditions as may be laid down by the East India Company;[358]

(g) to authorise the London board to appoint staff to, and to regulate, the company's India office (particularly as to the keeping of various registers of securities);[359] and

(h) to facilitate various miscellaneous matters.[360]

Status of the 1858 Act

10. The 1858 Act was the first in a short series, initially of two. It was designed to put the Great Southern of India Railway Company on a more formal footing and to provide sufficient powers for the company - amongst other things - to secure from the former East India Company guarantees for its borrowings (in exchange for which the East India Company would take a significant degree of control of the railway company's affairs).

11. Section 28 of the 1858 Act (the convoluted provision which authorised the railway company to borrow on mortgage or bond up to a fixed ceiling) was repealed and replaced later by the Great Southern of India Railway Amendment Act 1860 (see below).[361] And, when the Great Southern railway was amalgamated with the Carnatic railway in 1874, the 1858 Act was supplemented by further contractmaking provisions.[362]

12. The Great Southern of India Railway Company was eventually dissolved in 1874. The East India Company was also dissolved in 1874. The Secretary of State for India had taken over all of the East India Company's governmental and regulatory responsibilities, prior to dissolution, in September 1858 under the terms of the Government of India Act 1858.[363]

13. The 1858 Act is now spent and may be repealed in whole.

Extent

14. The 1858 Act related principally to the affairs of the Great Southern of India Railway Company. That company operated in India (principally in the Madras presidency) and in Great Britain (in London and Middlesex).

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

Great Southern of India Railway Amendment Act 1860 (23 & 24 Vict. c.xlix) - Purpose

16. In September 1858, following enactment of the 1858 Act, the Great Southern of India Railway Company contracted with the East India Company to construct a railway line from Negapatam (now Nagapattinam) to (or near to) Trinchinopoly (now Tiruchirapalli), and to pay to the East India Company £1 million by instalments (which it could draw upon with permission as the works proceeded), in return for which the East India Company would guarantee interest at 5% p.a. on the moneys for a term of 99 years, and would have the right to purchase the railway undertaking.[364]

17. In the same month, the East India Company was required to cede control of all governmental matters to the British Crown, and its various powers were then exercised by the Secretary of State in Council of India.[365] It was therefore to the Secretary of State that the railway company turned when, in 1860, it required further funding guarantees to complete the railway construction project.

18. By then the estimated cost of completing the railway was £0.5 million. Even when the share issue for that sum was fully subscribed, the railway company would need to borrow moneys to bridge the shortfall between the paid-up proportion (one half) and the overall project cost. To this end, and in order to produce additional statutory power to borrow up to £166,000 on mortgage (secured on the existing and future guarantees), the company promoted what was to become the 1860 Act.[366] The principal purposes of the 1860 Act were:

(a) to repeal earlier borrowing powers (by mortgage or bond), and to substitute alternative borrowing powers which would operate only with the sanction of the Secretary of State,[367] and which were subject to the railway company not raising sums which in aggregate would exceed the total capital ceiling set by the 1858 Act;[368]

(b) to authorise the raising of money through debenture stock issues, subject to not exceeding the company's overall borrowing limit;[369]

(c) to regulate the handling of debenture stock,[370] and of shares;[371] and

(d) to authorise the Secretary of State to appoint to the railway company's board a "deputy ex officio director" to act in the absence of the principal appointee.[372]

Status of the 1860 Act

19. The 1860 Act was designed for a narrow purpose: in broad terms, to facilitate the railway company raising additional capital for its construction project by debenture issue.

20. The 1860 Act was inextricably linked in its operation with the 1858 Act, and it was specifically provided in section 5 that "This [1860] Act shall be read in connexion with and as amending and altering the original Act [of 1858]". To that end the 1860 Act repealed section 28 of the 1858 Act, and substituted new arrangements relating to borrowing.

21. The 1860 Act itself has not been the subject of amendment or partial repeal.

22. The Great Southern of India Railway Company survived as an operational entity until 1874 when it was dissolved on formal amalgamation with the Carnatic Railway Co. Ltd., to form the South Indian Railway Company.[373]

23. The 1860 Act is now spent and may be repealed in whole.

Extent

24. The 1860 Act related principally to the affairs of the Great Southern of India Railway Company. That company operated in India (Madras) and in Great Britain (England).

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

South Indian Railway Act 1874 (37 & 38 Vict. c.cxii) - Purpose

26. In December 1873, the Great Southern of India Railway Company and the Carnatic Railway Company (together with the Secretary of State in Council of India) agreed to wind up the existing railway companies and to form an amalgamated company (the South Indian Railway Company), subject to ratification of the arrangement by parliamentary Act. The agreement also provided (amongst other matters) that the Secretary of State would co-operate with the amalgamated company in the construction of two railway lines (from Trichinopoly (now Tiruchirapalli) to Tuticorin (now Thoothukudi), and from Madras (now Chennai) to Tanjore (now Thanjavur), which lines were to be additional to those already constructed),[374] and that he would have the power either to accept (on behalf of the Queen and the government of India) a surrender of the railway undertaking, or to exercise an option to purchase that undertaking.[375]

27. In July 1874, the railway companies sought and obtained the 1874 Act which was designed to unite the companies "into one undertaking", and to give binding effect to the December 1873 agreement.[376] The purposes underpinning the 1874 Act were (in broad terms) these:

(a) to extend to India the territorial application of the Companies Clauses Consolidation Act 1845 (England), and part of the Railway Clauses Act 1863 (relating to amalgamation), for the purposes of the amalgamated railway company;[377]

(b) to extend to the two undertakings now subsumed within the single amalgamated company the provisions of both the 1858 and the 1860 Acts (relating to the former Great Southern of India Railway Company: see above);[378]

(c) to dissolve the Great Southern and the Carnatic companies, and to transfer their assets to the newly formed amalgamated company (the South Indian Railway Company);[379]

(d) to provide for the conversion of all existing stock and shares to those of equivalent value in the amalgamated company, and to limit the new "nominal guaranteed" interest-bearing capital to £3.8 million;[380]

(e) to confirm the terms of the December 1873 agreement as a binding arrangement between the Secretary of State and the amalgamated company, and to extend the range of contracts into which the company could enter with the Secretary of State;[381]

(f) to provide for the appointment (and qualification) of directors of, and auditors to, the amalgamated company, and for shareholders' meetings;[382] and

(g) to regulate the amalgamated company's borrowing powers.[383]

Status of the 1874

28. The 1874 Act's main theme was to lay the foundations for the merging of the two railway companies, their assets and their undertakings, to form the new South Indian Railway Company and to dissolve the two constituent entities. At the same time, the new company's on-going contractual relationship with the Indian government was placed on a secure footing.

29. Although the Great Southern Railway Company was dissolved by the 1874 Act, that Act very much kept alive - and extended the application of - the provisions of the 1858 and 1860 Acts. The 1874 Act itself was the subject of neither repeal nor amendment.[384]

30. The South Indian Railway Company was finally dissolved in 1948.

31. The 1874 Act is now spent and may be repealed in whole.

Extent

32. The 1874 Act related to the affairs of three railway companies: the Great Southern and the Carnatic (which were abolished as companies), and the newlyformed South Indian Railway Company. The amalgamated company operated across the south of India and in England (in London).

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

South Indian Railway (Additional Powers) Act 1888 (51 & 52 Vict. c.v) - Purpose

34. By 1888, the South Indian Railway Company had found it necessary to seek additional powers relating, first, to the construction and working of the railway network and, secondly, to the raising of capital.[385] To this end the railway company sought and obtained the 1888 Act,[386] the purposes of which were (in broad terms):

14. Nothing in the 1888 Act was to detract from the rights of existing shareholders under the December 1873 contract (as recited in the 1874 Act, Sch: see above): the 1888 Act, s13. Meanings contained within the 1874 Act and the Companies Clauses Consolidation Act 1845 were to apply within the 1888 Act, and parts of the Companies Clauses Acts 1863 and 1869 were to be taken as incorporated within the 1888 Act.

(a) to authorise the railway company to enter into contracts both with the Secretary of State in Council and with third parties (including "the government of any native state") for the construction, equipping and working "of any railway or part of a railway in India", whether or not forming part of the company's existing undertaking;[387]

(b) to authorise the railway company to raise moneys by a variety of means, including share and debenture issues;[388] and

(c) to require the railway company to use all capital moneys raised under the 1888 Act only for the purposes authorised by that Act, although moneys obtained from other sources (such as the Secretary of State or other governments) - which were surplus to their original requirements - could also be applied for such purposes.[389]

Status of the 1888 Act

35. The main purpose behind the 1888 Act was to provide additional contract-making and finance-raising powers to the now amalgamated South Indian Railway Company so that it could widen its operations.

36. The 1888 Act was an integral part in the chain of legislation stretching from 1858 onwards.[390] It was neither amended nor repealed by later legislation on Indian railways.

37. The South Indian Railway Company was finally dissolved in 1948.

38. The 1888 Act is now spent and may be repealed in whole.

Extent

39. The 1888 Act related to the affairs of the South Indian Railway Company. The amalgamated company operated across the south of India and in England (in London).

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

Consultation

41. 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. [341] Edward Henry Stanley, 15th Earl of Derby, (b.1826 - d.1893) As Secretary of State for the Colonies, 1858-9, Lord Stanley had responsibility for the India Act and he became the first Secretary of State for India after its enactment. After this post he became Secretary of State for Foreign Affairs and served under a number of administrations. Once in the Lords, he led the Liberal Unionists.

  2. [342] Sir Charles Wood, (b.1800 - d.1885) Chancellor of the Exchequer, 1846-52, President of the Board of Control, 1852-55, First Lord of the Admiralty, 1855-58, Secretary of State for India under Lord Palmerston's second administration, 1859-1866. He became Viscount Halifax in 1866.

  3. [343] 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; Government of India Railway Board, History of Indian Railways Constructed and In Progress corrected up to 31st March 1918 (1919) Government Central Press, India; Khosla, G. S. A History of Indian Railways (1988) Ministry of Railways, India.

  4. [344] South Indian Railway Act 1874 (37 & 38 Vict c.cxii), s 7.

  5. [345] South Indian Railway Act 1874, s 7, "At and from a time appointed for the commencement of this Act the Great Southern Company ... shall be dissolved". The Act came into force on 16 July 1874. This Act is proposed for repeal below. The archives of the Board of Trade indicate that the Great Southern of India Railway Company was dissolved. The records reside at the National Archives. The reference number for the record indicating that the company has been dissolved is BT31/246/808. The reference numbers for the other relevant records are BT41/272/1564, and BT285/332.

  6. [346] For further information see Ghosh, S. Railways in India - A Legend (2002) Jogemaya Prokashani, Kolkata.

  7. [347] The London Gazette, issue 26102, 31 October 1890, page 5756.

  8. [348] National Archives records from the archives of the Board of Trade, reference number BT31/31230/32802.

  9. [349] Preamble to The Great Southern of India Railway Act 1858 (21 & 22 Vict. c.cxxxviii) ("the 1858 Act") being "An Act to incorporate and regulate the Great Southern of India Railway Company, and for other Purposes connected therewith". Those "other purposes" included the authorisation of such "incidental or conducive" steps as might be needed to achieve the principal object. The short title of the 1858 Act for citation was provided by section 1.

  10. [350] The 1858 Act, preamble. In the context of the 1858 Act reference to the East India Company was also to include reference to "the Supreme Government from time to time of India": ibid., s 2.

  11. [351] The 1858 Act, s 19. The London office was also to be the railway company's "corporate domicile": ibid. By section 29 of the Act, the railway company was also authorised to establish an India office for the purpose of the issue, transfer and registration of shares and stock, and for the payment of dividends and interest. In this regard, the powers of the India office were to replicate those in Great Britain.

  12. [352] The newly incorporated company was to have a common seal, perpetual succession "in England, in India, and in all other places", and power to acquire and hold land: the 1858 Act, s

  13. [353] An area of land equal to £ acre or 0.1 of a hectare.

  14. [354] The 1858 Act, ss 9-11. In order to facilitate the principal object of the company ("to afford railway communication to the provinces of Southern India, and such other places as [the company] may from time to time determine": ibid., s 9), the company was also empowered, by section 39 of the 1858 Act, to enter into running agreements with other railway companies whereby each of the companies could operate "engines and carriages" over the other's rail system (and would apportion between them the operating receipts).

  15. [355] The 1858 Act, s 12. The 1845 Act (8 & 9 Vict. c.16) was to extend and apply, so far as was compatible, to "all acts and proceedings in India, in the same manner as in England": ibid. By way of amplification, section 13 provided that byelaws made under the 1845 Act "shall not be repugnant to the laws of India"; that the supreme courts of judicature in India should have the same jurisdiction in India as in England to deal with the enforcement of calls on shareholders (including forfeiture, for which notice would be given in the Government Gazette published in Madras); that the relief of insolvent debtors should be governed by those Acts then in force relating to insolvent debtors in India; that the tender of amends clauses should apply to such tender in India; and that statutory declarations could be made before a magistrate in India.

  16. [356] The 1858 Act, s 14. The East India Company was also authorised to provide the railway company with "any other support, countenance, and facilities for the purposes of their undertaking": ibid. The various contracts were to cover such matters as rights over revenues and royalties, supervision of the railway company's works and operations both in England and in India, appointment of an ex officio director to the board to represent the East India Company, appointment and regulation of agents "in India or elsewhere", depositing with the East India Company "all or any part of the subscribed capital of the [railway] company", making arrangements with third parties relating to "connecting lines and works" and such other matters as would be "expedient for the public advantage", and the eventual sale of the railway undertaking, outright or for a term of years, to the East India Company or to any other person: ibid. The capital of the railway company was fixed initially at £1 million (as per the original company) in £20 shares, but with power to increase that sum up to £3 million by the creation of additional shares: ibid., ss 15, 17. Calls on issued shares were to be subject to phasing: ibid., s 18.

  17. [357] The 1858 Act, ss 20-27. Shareholders' meetings were to be held twice-yearly in London, commencing April 1859, with a quorum of 20 (made up of shareholders holding in aggregate 1/50 of the company's capital). The original railway company directors were to become directors of the successor company, numbering five in all excluding the directors ex officio and "for India alone", and each was to hold a minimum of 50 shares: ibid., ss 23, 24. The London board was to appoint up to three additional directors based in India who would be "directors in and for India alone": ibid., s 25. Two auditors were to be appointed, retiring and being replaced by rotation: ibid., s 27.

  18. [358] The 1858 Act, s 28. This section was somewhat convoluted in its construction. It appeared to permit an initial borrowing of up to £330,000, followed by additional tranches which were in the aggregate not to exceed "one third of the amount of the additional capital beyond one million pounds sterling for the time being subscribed for". Presumably this formula was linked to the power of the company, in section 17 (above), to create up to £2 million additional share capital over and above the original £1 million.

  19. [359] The 1858 Act, s 30. The India office was to hold an "official seal" of the company to be used in lieu of the common seal for the purposes of issuing and transferring shares and stock, and was also to hold the Indian Registers of shareholders, consolidated stock, transfers, mortgages and bonds, and debentures (the entries in which would "from time to time" be copied to the London office, and double-entered in the London books with clear annotation): ibid., ss 30, 31, 33 and 34. Shares and other securities issued by the railway company in India were to bear both the common seal and the official seal: ibid., s 32. Share and stockholders could give notice of their wish to transfer their registration from London to India or vice versa: ibid., s 35.

  20. [360] The 1858 Act, ss 36-38 and 40. Thus, provision was made for determining the appropriate law which needed to be applied to resolve any question relating to a share or other holding; for authorisation of proxies for non-UK resident shareholders to vote; for the giving of public notice relating to the company's proceedings (in newspapers in London or Middlesex and in "the presidency of Madras"); and for defraying the cost of promoting the 1858 Act (to be borne by the railway company).

  21. [361] Great Southern of India Railway Amendment Act 1860 (23 & 24 Vict. c.xlix), s 6.

  22. [362] See the South Indian Railway Act 1874, s 11 (discussed below).

  23. [363] 21 & 22 Vict. c.106 (1858).

  24. [364] Preamble to the Great Southern of India Railway Amendment Act 1860 (23 & 24 Vict. c.xlix) ("the 1860 Act"), being "An Act to amend The Great Southern of India Railway Act 1858; and for other Purposes". The short title of the Act was assigned by section 1. The East India Company was authorised under the contractual arrangement to appoint an ex officio director of the railway company with a power of veto.

  25. [365] See the Government of India Act 1858, c.106 (see above). Under this Act (as the 1860 Act put it) "all contracts, covenants, liabilities, and engagements of the East India Company made, incurred, or entered into before the commencement of [the Government of India] Act" were as enforceable against the Secretary of State as they had been against the East India Company: the 1860 Act, preamble.

  26. [366] The 1860 Act, preamble. The railway company also needed power to create debenture stock as an alternative to borrowing or mortgaging: ibid. The cost of promoting the 1860 Act was to be borne by the railway company: ibid., s 25.

  27. [367] The 1860 Act, ss 6-8. Section 6 repealed the provisions in the 1858 Act, s 28 (see above), and section 7 replaced those provisions with power initially to raise up to £166,000 by guaranteed borrowing on mortgage when a justice had certified that £250,000 had been paid up on the company's issued shares, and later to raise further tranches of £166,000 on similar terms based on additional share issues (or by special borrowing on mortgage: see section 8).

  28. [368] The 1860 Act, s 9.

  29. [369] The 1860 Act, ss 10, 12. Raising of moneys by debenture issue was to be in lieu of borrowing or to repay moneys previously borrowed (and solely for those purposes), and was to be effected only with the sanction of the Secretary of State and on a 3/5 vote of shareholders at an EGM. Debenture stock could carry guaranteed interest or dividend not exceeding 5% p.a., which interest would rank next in priority to the mortgage debt interest and would be a charge on the undertaking of the company: ibid., ss 11, 13.

  30. [370] The 1860 Act, ss 14-18. No company voting rights were to attach to the holding of debenture stock; debenture stock could be allocated to mortgage lenders so as to pay off portions of debt; and debenture stock was to be transferable, disposable, registrable on the lines of the Companies Clauses Consolidation Act 1845, and accounted for separately.

  31. [371] The 1860 Act, ss 19-23. Once shares were fully paid up, the company could "consolidate" the capital into stock. That consolidated stock would carry the same entitlement to interest, dividend or other privileges: ibid., ss 19, 20; but no interest or dividend would be due to shareholders who had failed to pay up on any share call: ibid., s 22. Notice of share calls would be given in England or in India, dependant upon where the shares were registered: ibid., s 21. All share transferees were required to demonstrate they had "sufficiency to discharge [any] future calls thereon" prior to registration, so as to prevent "illusory transfers": ibid., s 23 and sectional sidenote.

  32. [372] The 1860 Act, s 24.

  33. [373] See the South Indian Railway Act 1874 (37 & 38 Vict. c.cxii), below, at sections 7,18 and 19 (operative from 1 July 1874).

  34. [374] These lines were from Negapatam (now Nagapattinam) to Trichinopoly, from Trichinopoly to Errode, and from Arconum Junction (now Arakkonam Junction) to Conjeveram (now Kanchipuram).

  35. [375] Preamble to, and Schedule to, the South Indian Railway Act 1874 (37 & 38 Vict. c.cxii) ("the 1874 Act"), being "An Act for the Amalgamation of the Great Southern of India and Carnatic Railway Companies, and for enabling the amalgamated Company to make Agreements with the Secretary of State in Council of India; and for other purposes". The short title to the 1874 Act was assigned by section 1. The Schedule to the 1874 Act recited in full the terms of the December 1873 tri-partite indenture. The options to surrender and to purchase were exercisable for a period of 999 years running from March 1870: see indenture, clauses 30, 31. The 1873 agreement was to be of "no effect" unless and until the amalgamation Act was obtained: indenture, clause 39.

  36. [376] Under that agreement, all existing governmental contracts were to be rescinded and replaced by the aggregated agreement: indenture, clause 3 (operative from June 1874). The costs of obtaining the 1874 Act were to be borne by the newly formed "amalgamated company": the 1874 Act, s 20.

  37. [377] The 1874 Act, ss 3, 4. The meanings of words and expressions used in the 1845 Companies Act were to apply to those within the 1874 Act. The Indian Railway Companies Act 1868, c.26 (relating to guaranteed companies raising money on debenture stock) was also specifically applied to the functioning of the amalgamated railway company: the 1874 Act, s 12.

  38. [378] The 1874 Act, s 18. The provisions were to apply "except where varied by or inconsistent with this [1874] Act, or the [1873] agreement in the schedule to this Act": ibid. Section 18 specifically referred to the two undertakings having been owned by the now "dissolved companies".

  39. [379] The 1874 Act, ss 5-7. The Act delineated the two existing undertakings and their holdings, and provided for transfer of all assets and liabilities to the amalgamated company at "the time appointed for the commencement of this [1874] Act" (being 1 July 1874: see section 19).

  40. [380] The 1874 Act, s 8. Interest on the capital in the amalgamated company was guaranteed at 5% p.a. by the Secretary of State in Council. Share and stock certificates relating to the former companies were to be exchanged for those of the amalgamated company: ibid., s 9.

  41. [381] The 1874 Act, ss 10, 11. The contract-making powers originally set out in the Great Southern of India Railway Act 1858, s 14 (see above) were supplemented and reinforced after 1 July 1874 by additional powers relating to, for example, construction of new railways, and obtaining of guarantees of interest, all leading - in the longer term - to the "surrendering or selling at any future period" of the joint undertaking to the Secretary of State or to an approved third party: ibid., s 11(A)-(G).

  42. [382] The 1874 Act, ss 13-15 and 17. The number of directors in the new company was not to exceed five, excluding the "government director", and the number of auditors was not to exceed two.

  43. [383] The 1874 Act, s 16. All borrowing powers vested in the existing companies (as to mortgages, bond and debenture issues) were to cease, and were to be replaced by similar powers exercisable by the amalgamated company "with the sanction of the Secretary of State in Council": ibid.

  44. [384] The 1874 Act was referred to within an interpretation provision and a savings provision in the South Indian Railway (Additional Powers) Act 1888, ss 3, 13.

  45. [385] Preamble to the South Indian Railway (Additional Powers) Act 1888 (51 & 52 Vict. c.v) ("the 1888 Act"), being "An Act for conferring additional powers on the South Indian Railway Company, and for other purposes". The short title to the 1888 Act was assigned by section 1. The preamble to the Act was relatively (and unusually) brief.

  46. [386] The costs of obtaining this Act were to be borne by the railway company: the 1888 Act, s

  47. [387] The 1888 Act, s 4. The contracting power was supplemented by ancillary power to "do all such things as may be necessary or incidental" to the principal purpose: ibid. In the present context India was defined as including not only the Queen's territories but also "any territory in the East Indies belonging to any native prince or state in alliance with Her Majesty or to any European power": ibid., s 3.

  48. [388] The 1888 Act, s 5. The methods of fundraising were: creation of new ordinary shares or stock, and of preference shares or stock, and borrowing by way of mortgage, bond, debentures or debenture stock. None of these methods could be adopted, however, without the sanction of the Secretary of State. All debenture stock was to be issued in accordance with the Indian Railway Companies Act 1868 (31 & 32 Vict. c.26) (now repealed) which governed the raising of moneys by "guaranteed" Indian railway companies, and which - by the 1888 Act - was deemed to include the South Indian Railway Company. New share and stockholders were entitled to the same rights as attached to previous issues which formed part of the company's capital: ibid., s 6, and - with sanction - the company could charge new debenture stock upon the whole or any part of its undertaking (although where charged only on part, that part was to be ring-fenced and separate accounts were to be maintained): ibid., ss 7, 9 and 10.

  49. [389] The 1888 Act, ss 8, 12.

  50. [390] The 1888 Act spoke of moneys raised by the railway company "by any of their Acts": ibid., s 12. The 1874 Act had specifically kept alive the 1858 and 1860 Act powers (see above).

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