STATE BANK OF SIKKIM (ACQUISITION OF SHARES) AND MISCELLANEOUS PROVISIONS ACT 1982

THE STATE BANK OF SIKKIM(ACQUISITION OF SHARES) AND MISCELLANEOUS PROVISIONS ACT, 1982

ACT No. 62 OF 1982

6thNovember, 1982

An Act to provide, in the public interest, for the acquisition ofcertain shares of the State Bank of Sikkim for the purpose of betterconsolidation and extension of banking facilities in the State of Sikkim andfor matters connected therewith or incidental thereto

WHEREAS for the purpose ofbetter consolidation and extension of banking facilities in the State ofSikkim, it is expedient to provide for a single apex banking institution inthat State, and for that purpose to provide for the acquisition of certainshares of the State Bank of Sikkim and for matters connected therewith orincidental thereto;

BE it enacted by Parliament inthe Thirty–third Year of the Republicof India as follows: –

CHAPTER I

PRELIMINARY

1.Short title and commencement: (1) This Act may be called theState Bank of Sikkim(Acquisition of Shares) and Miscellaneous Provisions Act, 1982.

(2) It shall come into force onsuch date as the Central Government may, by notification in the OfficialGazette.

2.Definitions:In this Act, unless the contextotherwise requires, –

(a) "appointedday" means the date on which this Act comes into force;

(b) "co–operativebank" means the Sikkim State Co–operative Bank Limited, a societyregistered under the Sikkim Co–operative Societies Act, 1978;

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

(d) "prescribed"means prescribed by rules made under this Act;

(e) "Sikkim Bank"means the State Bank of Sikkimconstituted under the State Bank of Sikkim Proclamation, 1968;

(f) "StateGovernment" means the State Government of Sikkim;

(g) "United CommercialBank" means the United Commercial Bank constituted under section 3 of theBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of1970);

(h) wordsand expressions used herein and not defined but defined in the Companies Act,1956 (1 of 1956) , shall have the meanings respectively assigned to them inthat Act.

CHAPTER II

ACQUISITION AND TRANSFER OF CERTAIN SHARES OF SIKKIM BANK

3.Vesting in the Central Government ofcertain shares of Sikkim Bank: (1) On the appointed day, all the shares in the shares capital ofthe State Bank of Sikkim,other than the shares held by the State Government, shall, by virtue of thisAct, stand transferred to, and shall vest in, the Central Government.

(2) All the shares which havevested in the Central Government under sub–section (1) shall, by forceof such vesting, be freed and discharged of all trusts, liabilities,obligations, mortgages, charges, liens and other encumbrances affecting them,and any attachment or injunction or any decree or order of any court, tribunalor other authority restricting the use of such shares in any manner shall bedeemed to have been withdrawn.

(3) Notwithstanding thetransfer of the shares of the Sikkim Bank to the Central Government under sub–section(1) , any person holding such shares, who immediately before the appointed dayis entitled to payment of dividend on such shares, shall be entitled to receivefrom the co–operative bank –

(a) all dividends accruing dueon his shares in respect of the half–year which ended before theappointed day and remaining unpaid;

(b) dividendscalculated at a rate to be specified by the Central Government in respect ofany period immediately preceding the appointed day for which the Sikkim Bankhad not declared any dividend.

CHAPTER III

VESTING OF UNDERTAKINGS OF SIKKIM BANK IN THE CENTRAL GOVERNMENT

4.Vesting of undertaking of Sikkim Bank: On the appointed day, theundertakings of the Sikkim Bank shall, by virtue of this Act, stand transferredto, and shall vest in, the Central Government.

5.General effect of vesting: (1) The undertakings of theSikkim Bank shall be deemed to include all assets, rights, powers, authoritiesand privileges, and all property, movable and immovable, cash balances, reservefunds, investments and all other rights and interests in, or arising out of,such property as were immediately before the appointed day in the ownership,possession, power or control of the Sikkim Bank in relation to itsundertakings, and all book of account, registers, records and all otherdocuments of whatever nature relating thereto and shall also be deemed toinclude all borrowings, liabilities and obligations of whatever kind thensubsisting of the Sikkim Bank in relation to its undertakings.

(2) Unless otherwise expresslyprovided in this Act, all contracts, deeds, bonds, agreements, powers ofattorney, grants of legal representation and other instruments of whatevernature subsisting or having effect immediately before the appointed day and towhich the Sikkim Bank is a party or which are in favour of the said Bank shallbe of as full force and effect against or in favour of the Central Government.

(3) If, on the appointed day,and suit, appeal or other proceeding of whatever nature in relation to anybusiness of the undertakings which have been transferred under section 4 ispending by or against the Sikkim Bank, the same shall not abate, bediscontinued, or be in any way prejudicially affected by reason of the transferof the undertakings of the Sikkim Bank or of anything contained in this Act,but the suit, appeal or other proceeding may be continued, prosecuted orenforced by or against the Central Government.

6.Vesting of the shares andundertakings of Sikkim Bank in the State Government: (1) Notwithstanding anythingcontained in sections 3, 4 and 5, the Central Government shall as soon as maybe, after the commencement of this act, direct by notification that the sharesof the Sikkim Bank which have vested in the Central Government under section 3and the undertakings of the Sikkim Bank which have vested in the CentralGovernment under section 4 shall, instead of continuing to vest in the CentralGovernment, vest in the State Government of Sikkim, on the date of thenotification.

(2) Where the shares and theundertakings of the Sikkim Bank vest in the State Government under sub–section(1) , the State Government shall, on and from the dateof such vesting be deemed to have become the owner in relation to such sharesand undertakings and all the rights and liabilities of the Central Governmentin relation to such shares and undertakings shall, on and from the date of suchvesting be deemed to have become the rights and liabilities, respectively, ofthe State Government.

7.Power of State Government todirect vesting of the undertakings of Sikkim Bank the Sikkim Co-operative bank: (1) Notwithstanding anythingcontained in sections 4, 5 and 6, the State Government may, if it is satisfiedthat the co–operative bank is willing to comply, or has complied, withsuch terms and conditions as that Government may think fit to impose, includingthe terms and conditions regarding allotment of its shares, direct, bynotification that the undertakings of the Sikkim Bank which have vested in theCentral Government under section 4 and thereafter in the State Government undersection 6, shall instead of continuing to vest in the State Government, vest inthe co–operative bank either on the date of the notification or on suchearlier or later date (not being a date earlier than the appointed day) asmaybe specified in the notification.

(2) Where the undertakings ofthe Sikkim Bank vest in the co–operative bank under sub–section(1) that bank shall, on and from the date of such vesting, be deemed to havebecome the owner in relation to such undertakings and all the rights and liabilitiesof the Central Government or the State Government in relation to suchundertakings shall, on and from the date of such vesting be deemed to havebecome the rights and liabilities, respectively, of the co–operativebank.

CHAPTER IV

PAYMENT OF AMOUNTS

8.Payment of amounts: (1) For the transfer to, andvesting in the Central Government, of the shares of the Sikkim Bank undersection 3, there shall be given by the Central Government to the holders ofsuch shares in cash and in the manner specified in the Schedule, an amount ofrupees eight lakhs twelve thousand two hundred and ninety–five.

(2) The amount specified in sub–section(1) shall carry simple interest at the rate of five and a half percent perannum for the period commencing on the appointed day and ending on the date onwhich payment of such amount is made to the shareholders.

CHAPTER V

MANAGEMENT, ETC, OF THE UNDERTAKINGS OF SIKKIM BANK

9.Management etc., of theundertakings of Sikkim Bank: (1) The State Government in which the undertakings of the SikkimBank have vested under section 6 shall be entitled to exercise all such powersand do all such things as the Sikkim Bank is authorised to exercise and do inrelation to its undertakings.

(2) The generalsuperintendence, direction, control and management of the affairs and businessof the undertakings of the Sikkim Bank which have vested under section 4 in theCentral Government and under section 6in the State Government shall, where adirection has been made by the State Government under sub–section (1) ofsection 7, vest in the co–operative bank specified in such direction andthereupon, the co–operative bank shall be entitled too exercise all suchpowers and do all such things as the Sikkim Bank is authorised to exercise anddo in relation to its undertakings.

10.Dateof delivery possession of property acquired and documents relating thereto: (1) On the vesting of theundertakings of the Sikkim Bank in the State Government under section 6, everyperson in whose possession or custody or under whose control any propertyreferred to in sub–section (1) of section 5 may be shall deliver theproperty to the State Government forthwith

(2) Any person who, on theappointed day, has in his possession or under his control any books documentsor other papers relating to the undertakings of the Sikkim Bank which havevested in the State Government under section 6 and which belong to that Bank,or would have so belonged if the undertakings of the Sikkim Bank had not vestedin the State Government shall be liable to account for the said books,documents or other papers to the State Government and shall deliver them up tothe State Government.

(3) The State Government maytake or cause to be taken, all necessary steps for securing possession of allproperties which have vested in that Government under this Act.

CHAPTER VI

PROVISIONS RELATING TO THE EMPLOYEES OF THE SIKKIM BANK

11.Transferof service of existing officers and employees of the Sikkim Bank to theco-operative bank: (1) Every officer or other employee of the Sikkim Bank (exceptingthe Managing Director

thereof) in the employment of theSikkim Bank immediately before the appointed day shall become, –

(a) anofficer or other employee of the State Government on an from the appointed day,and

(b) where the undertakings ofthe Sikkim Bank are directed, under sub–section (1) of section 7, tovest in the co–operative bank, an officer or other employee of the co–operativebank on and from the date of such vesting,

and shall hold his office orservice under the State Government or the co–operative bank, as the casemay be with the same rights and privileges as to pension, gratuity and othermatters as would have been admissible to him if there had been no such vestingand shall continue to do so unless and until his employment under the StateGovernment or the co–operative bank, as the case may be, is dulyterminated or until his remuneration and other conditions of service are dulyaltered by the State Government or by the co–operative bank, as the casemay be.

(2) Any person who, on theappointed day, is entitled to or is intercept of a pension or othersuperannuation or compassionate allowance or benefit form the Sikkim Bank orany provident fund, pension or other fund or any authority administering suchfund shall be entitled to be paid, by and to receive from, the co–operativebank or any provident fund pension or other fund or any authority administeringsuch fund the same pension, allowance or benefit so long as he observes theconditions on which the pension, allowance or benefit was granted, and if anyquestion arises as to whether he has so observed such conditions the questionshall be determined by the State Government.

(3) Notwithstanding anythingcontained in sub–section (1) or sub–section (2) no appointmentmade or promotion, increment in salary, pension allowance or any other benefitgranted to any person after the 16th day of November 1976, and before theappointed day which would not ordinarily have been made or granted or which wouldnot ordinarily have been admissible under the rules or authorisation of theSikkim, Bank or of any provident fund or other fund in force prior to the 16thday of November 1976., shall have effect or be payable or claimable from the co–operativebank or from any provident fund, pension or other fund or from any authorityadministering the fund, unless the State Government has by general or specialorder, confirmed the appointment promotion or increment or has directed thecontinued grant of the pension allowance or other benefit as the case may be.

(4) Notwithstanding anythingcontained in the Industrial Disputes Act.1947 (14 of 1947) ,or in any other law for the time being in force, the transfer of the servicesof any officer or other employee of the Sikkim Bank to the State Government orth e co–operative bank shall not entitle such officer or other employeeit any compensation under that Act or under any other law for the time being inforce and no such claim shall be entertained by any court, tribunal or otherauthority.

(5) Any person holding asManaging Director of the Sikkim Bank immediately before the appointed day shallbe deemed to have vacated his office as such on the appointed day andnotwithstanding anything contained in this Act or in any other law for the timebeing in force or in any agreement or contract, he shall not be entitled to anyamount from the Sikkim Bank, State Government , or the co–operative bankfor the loss of office or for the premature termination of any agreement or contactrelating to his employment except such pension, amount or other benefit whichthe co–operative bank may grant to him having regard to what that personwould have received as an officer of the Sikkim Bank if this act had not beenpassed and if he had retired from his employment in the ordinary course.

(6) Where the Managing Directorof the Sikkim Bank has after the 16th day of November 1976 and before theappointed day, been paid any sum by way of compensation or gratuity, the co–operativebank shall be entitled to claim refund of any sum so paid if the payment is notconfirmed by the State Government by general or special order.

CHAPTER VII

MISCELLANEOUS

12.Act to have overridingeffect: The provisions of this actshall have effect notwithstanding anything inconsistent therewith contained inany other law for the time being in force or in any instrument having effect byvirtue of any law, other than this Act, or in any decree or order of any court,tribunal or other authority.

13.Protectionof action taken in good faith: (1) No suit, prosecution or other legal proceeding shall lieagainst the Central Government or any officer of that Government or the StateGovernment, or the co–operative bank or other officer of the StateGovernment or the co–operative bank or other person authorised by theCentral Government or the State Government or the co–operative bank, foranything which is good faith done or intended to be done under this Act.

(2) No suit or other legalproceeding shall lie against the Central Government or any officer or otheremployee of that Government or the State Government or the co–operativebank or any officer or other employee of the state Government or of the co–operativebank or other person authorised by the State Government or the co–operativebank, for any damage caused or likely to be caused by anything which is in goodfaith done or intended to be done under this Act.

14.Penalties: Any person who, –

(a) having in his possessioncustody or control any property forming part of the undertakings of the SikkimBank, wrongfully withholds such property from the Central Government, or theState Government or the co–operative bank; or

(b) wrongfully obtainspossession of or retains any property forming part of any undertaking of the SikkimBank or wilfully withholds or fails to furnish to the Central Government or theState Government or the co–operative bank, or any person or body ofpersons specified, by that Government or the State Government or the co–operativebank any document relating to such undertaking which may be in his possessioncustody, or control or fails to deliver to the Central Government, or the StateGovernment or the co–operative bank or any person or body of personsspecified by the Central Government or the State Government or the co–operativebank, any assets, books of account, registers or other documents in hispossession custody or control, relating to the undertakings of the Sikkim Bank;or

(c) wrongfully removes ordestroys any property forming part of any undertaking of the Sikkim Bank orprefers any claim under this act which he knows or has reasonable cause tobelieve to be false or grossly inaccurate,

shall be punishable withimprisonment for a term which may extend to two years, or with fine which may extendto ten thousand rupees, or with both.

15.Offencesby companies: (1)Where an offence under this act has been committed by a company, every personwho at the time the offence was committed was in charge of, an d wasresponsible to the company for the conduct of the business of the company, aswell as the company, shall be deemed to be guilty of the offence and shall beliable to be proceeded against an punished accordingly:

Provided that nothing containedin this subs–section shall render any such person liable to anypunishment if he proves that the offence was committed without his knowledge orthat he had exercised all due diligence to prevent the commission of suchoffence.

(2) Notwithstanding anythingcontained in subs–section (1) , where any offenceunder this act has been committed by a company and it is proved that theoffence has been committed with the conceit or connivance, of or isattributable to any neglect on the part of any director, manager, secretary, orother officer of the company, such director, manager, secretary or otherofficer shall be deemed to be guilty of that offence and shall be liable to beproceeded against and punished accordingly.

Explanation: For thepurposes of this section, –

(a) "company"means anybody corporate and includes a firm or other association ofindividuals; and

(b) "director",in relation to a firm means a partner in the firm.

16.Delegation of powers: (1) The Central Governmentmay, by notification direct that all or any of the powers exercisable by itunder this Act, other than the powers conferred by sections 17 and 18, may alsobe exercised by such person or persons as may be specified in the notification.

(2) Whenever any delegation ofpower is made under sub–section (1) the person to whom such power hasbeen delegated shall act under the direction, control, and supervision of theCentral Government.

17.Powerof Central Government to make rules: (1) The Central Government may by notification,make rules for carrying out the provisions of this Act.

(2) Every rule made by theCentral Government under this Act shall be laid as soon as may be after it ismade, before each House of Parliament while it is in session for a total periodof thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid, both Houses agreein making any modification in the rule or both Houses agree that the ruleshould not be made, the rule shall thereafter have effect only in such modifiedfrom or be of no effect, as the case may be; so however that any suchmodification or annulment shall be without prejudice to the validity ofanything previously done under that rule.

18.Powerto remove difficulties: If any difficulty arises in giving effect to the provisions ofthis Act, the Central Government may, by order, nor inconsistent with theprovisions of this Act, remove the difficulty:

Provided that no such ordershall be made after the expiry of a period of two years from the appointed day.

19.Referencesto Sikkim Bank in Other laws: On and from the appointed day, any reference to Sikkim Bank in anylaw (other than this Act or the State Bank of Sikkim Proclamation, 1968) or inany contract or other instrument shall, except as otherwise provided in anygeneral or special order made by the Central Government, be deemed to be areference to the co–operative bank.

20.Dissolutionof Sikkim Bank: On thedate of the issue of notification under sub–section (1) of section 6,the Sikkim Bank shall stand dissolved, and the State Bank of SikkimProclamation 1968, shall stand repealed; and the provisions of section 6 of theGeneral Clauses act, 1897 (10 of 1897) shall apply to such repeal as if thesaid Proclamation were a Central Act.

THE SCHEDULE

[Seesection 8(1) ]

MANNER OF PAYMENT OF AMOUNT FOR THE TRANSFER OF SHARES OF THE

STATE BANK OF SIKKIM TO THE CENTRAL GOVERNMENT.

1.In this Schedule,"shareholder" means any person who, immediately before the appointedday is registered as the holder of a share in the Sikkim bank, other than the StateGovernment of Sikkim

2.For every share in the sharecapital of the Sikkim Bank which, by reason of this act, is transferred to andvested in the Central Government the Central Government shall pay to everyholder thereof in the manner specified in paragraph 3 of this Schedule anamount calculated at the rate of rupees fifty–five per share.

3.Every person who is registered asthe holder of a share in the Sikkim Bank on the appointed day and whose shareshave been acquired under the provisions of this Act shall, for every such shareso held by him, be paid an amount calculated at the rate specified in paragraph2 by cheque drawn on the Reserve Bank of India.

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