INDIAN IRON AND STEEL COMPANY (ACQUISITION OF SHARES) ACT 1976
EmailTHE INDIAN IRON AND STEEL COMPANY (ACQUISITION OF SHARES) ACT,1976
ACT No. 89 OF 1976
2ndSeptember, 1976
An Act to provide for the acquisition of certain shares of theIndian Iron and Steel Company Limited with a view to securing the propermanagement of the affairs of the Company and the continuity and development ofthe production of goods which are vital to the needs of the country and formatters connected therewith or incidental thereto
WHEREAS the management of theundertaking of the Indian Iron and Steel Company Limited was taken over by theCentral Government for a limited period under the Indian Iron and Steel Company(Taking Over of Management) Act, 1972 (40 of 1972), in order to secure theproper management of such undertaking;
AND WHEREAS the top managementof the Company was guilty of mismanagement of the affairs of the Company andrestoration, after the expiry of the limited period aforesaid, of themanagement of the affairs of the Company to such top management would beprejudicial to the interests of the Company and to the public interest;
AND WHEREAS investment of alarge amount is necessary for the maintenance and development of the productionof the undertakings of the Company;
AND WHEREAS acquisition by theCentral Government of an effective control over the affairs of the Company isnecessary to enable it to make the investment aforesaid;
BE it enacted by Parliament inthe Twenty–seventh Year of the Republic of Indiaas follows: –
CHAPTER I
PRELIMINARY
1.Short title and commencement:(1) This Act may be called theIndian Iron and Steel Company (Acquisition of Shares) Act, 1976.
(2) It shall be deemed to havecome into force on the 17th day of July, 1976.
2.Definitions:In this Act, unless the contextotherwise requires, –
(a) "appointedday" means the 17th day of July, 1976;
(b)"bank" means a banking company within the meaning of the BankingRegulation Act, 1949;
(c)"Company" means the Indian Iron and Steel Company Limited, being acompany within the meaning of the Companies Act, 1956, and having itsregistered office at IISCO House, 50, ChowringheeRoad, Calcutta;
(d)"Commissioner" means the Commissioner of Payments appointed undersection 5;
(e)"notification" means a notification published in the OfficialGazette;
(f)"prescribed" means prescribed by rules made under this Act;
(g)"share" means a share, whether equity or preference, in the capitalof the Company, and includes a share pledged by any shareholder with any bankor other creditor, but does not include any share in the capital of the Companyheld by –
(i) anyState Government;
(ii) theState Bank of India,established under section 3 of the State Bank of India Act, 1955 and itssubsidiary banks;
(iii) theSteel Authority of India Limited, a company formed and registered under theCompanies Act, 1956, and having its registered office at Hindustan Times House,Kasturba Gandhi Marg, New Delhi;
(iv) theLife Insurance Corporation of India,established under section 3 of the Life Insurance Corporation Act, 1956;
(v) theUnit Trust of India,established under section 3 of the Unit Trust of India Act, 1963;
(vi) anycorresponding new bank, within the meaning of the Banking Companies(Acquisition and Transfer of Undertakings) Act, 1970;
(vii) anygeneral insurance company nationalised by the General Insurance Business(Nationalisation) Act, 1972;
1 [(h) "shareholder"means, –
(i) a person who, immediatelybefore the appointed day, was registered by the Company as the holder of anyshare and includes his legal representative; or
(ii) a person who, before theappointed day, had lodged with the Company a proper instrument of transfer ofany share in the form prescribed under section 108 of the Companies Act, 1956(1 of 1956.), and executed in accordance with the provisions of thatsection; or
(iii) a person who claims undera proper instrument of transfer of any share in the form prescribed undersection 108 of the Companies Act, 1956 (1 of 1956.), and delivers suchinstrument, duly executed, to the Commissioner **[before the expiry of onehundred and twenty days from the date of commencement of the Indian Iron and Steel Company(Acquisition of Shares) Amendment Act,1981.]]
(i) "specified date"means such date as the Central Government may, for the purpose of any provisionof this Act, by notification, specify.
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1. Substituted for the originalclause (h) by the Indian Iron and Steel Company (Acquisition of Shares)Amendment Act, 1977 (39 of 1977) Section 2.
2. Substituted for the words"on or before such date as the Central Government may, by notification,specify in this behalf;" by the Indian Iron and Steel Company (Acquisitionof Shares) Amendment Act, 1981 (59 of 1981) Section 2.
CHAPTER II
ACQUISITION OF THE SHARES OF THE COMPANY
3.Transfer and vesting ofshares of the company in the central Government:(1) On the appointed day, all the shares of theCompany shall, by virtue of this Act, stand transferred to, and vested in, theCentral Government.
(2) The Central Governmentshall be deemed, on and from the appointed day, to have been registered in theRegister of members of the Company as the holder of each share which standstransferred to, and vested in, it by virtue of the provisions of sub–section(1).
(3) 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 incumbrances affecting them,and any attachment, injunction or any decree or order of the court, tribunal orother authority restricting the use of such shares in any manner, shall bedeemed to have been withdrawn.
(4) For the removal of thedoubts, it is hereby declared that the provisions of sub–sections (1) and(2) shall not be deemed to affect –
(a) any right of the Companysubsisting, immediately before the appointed day, against any shareholder torecover from such shareholder any sum of money on the ground that theshareholder has not paid or credited to the Company the whole or any part ofthe value of the shares held by him, or on any other ground whatsoever; or
(b) any right of theshareholder subsisting, immediately before the appointed day, against theCompany to receive any dividend or other payment due from the Company.
4.Payment of amounts:(1) For the transfer to, andvesting in, the Central Government, under section 3, of the shares of theCompany, there shall be given by the Central Government to the shareholders ofthe Company, in cash and in the manner specified in section 6, an amount ofrupees seven crores, twenty–three lakhs, ninety–five thousand andone hundred and thirty–seven and fifteen paise.
(2) The amount, referred to insub–section (1), shall carry simple interest at the rate of four percentper annum for the period commencing on the appointed day and ending on the dateon which payment of such amount is made by the Central Government to theCommissioner.
5.Appointment of Commissionerof Payments: (1) TheCentral Government shall, for the purpose of disbursing the amounts payable tothe Company under section 4, by notification, appoint a Commissioner ofPayments.
(2) The Central Government mayappoint such other persons as it may think fit to assist the Commissioner andthereupon the Commissioner may authorise one or more of such persons also toexercise all or any of the powers exercisable by him under this Act, anddifferent persons may be authorised to exercise different powers.
(3) Any person authorised bythe Commissioner to exercise any of the powers exercisable by the Commissionermay exercise those powers in the same manner and with the same effect as ifthey have been conferred on that person directly by this Act, and not by way ofauthorisation.
(4) The salaries and allowancesof the Commissioner and other persons appointed under this section shall bedefrayed out of the Consolidated Fund of India.
6.Payment by the CentralGovernment to the Commissioner:(1) The Central Government shall, within thirty days from thespecified date, pay, in cash, to the Commissioner, for payment to theshareholders of the Company, –
(a) an amount equal to theamount specified in sub–section (1) of section 4; and
(b) an amount equal to theamount determined under sub–section (2) of section 4.
(2) A deposit account shall beopened by the Central Government in favour of the Commissioner, in a PublicAccount of India, and every amount paid under this Act to the Commissionershall be deposited by him to the credit of the said deposit account and thesaid deposit account shall be operated by the Commissioner.
(3) The interest accruing onthe amount standing to the credit of the deposit account, referred to in sub–section(2), shall ensure to the benefit of the shareholders of the Company.
7.Claims to be made to theCommissioner:(1) Everyshareholder, having a claim in relation to any share acquired by this Act,shall prefer such claim before the Commissioner 1 [before the expiry of one hundred and twenty days from the dateof commencement of the Indian Iron and Steel Company (Acquisition of Shares)Amendment Act, 1981]:
2 [Provided that if the Commissioner is satisfied that the claimantwas prevented by sufficient cause from preferring the claim before the expiryof the said period of one hundred and twenty days, he may entertain the claimwithin a further period of one hundred and twenty days and not thereafter;]
3 [(1A) Every claim preferred under sub-section (1)as it stood before the commencement of the IndianIron and Steel Company (Acquisition of Shares) Amendment Act, 1981, after theexpiry of the period or date specified therein shall be deemed to have beenreferred under the said sub-section as amended by the said Amendment Act andshall be dealt with (even if it had been disallowed before such commencement)as if it had been preferred within time.]
(2) Every shareholder of apreference share shall have a preferential claim with regard to the amount paidby the Central Government to the Commissioner.
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1. Substituted for the words"on or before the 30th day of November, 1977" by the Indian Iron andSteel Company (Acquisition of Shares) Amendment Act, 1981 (59 of 1981) Section3 (a) (i) which earlier substituted for the words "within thirty days fromthe specified date" by the Indian Iron and Steel Company (Acquisition ofShares) Amendment Act, 1977 (39 of 1977) Section 3 (i).
2. Substituted for the provisoby the Indian Iron and Steel Company (Acquisition of Shares) Amendment Act,1981 (59 of 1981) Section 3 (a) (ii) which earlier substituted for the originalproviso by the Indian Iron and Steel Company (Acquisition of Shares) AmendmentAct, 1977 (39 of 1977) Section 3 (ii).
3. Sub-section (1A) by theIndian Iron and Steel Company (Acquisition of Shares) Amendment Act, 1981 (59of 1981) Section 3 (b).
1 [7A.Power of Commissioner to inquire into disputes as topersons entitled to any amount:Where there is any dispute as to the person or persons who are entitledto any amount payable under this Act (including any dispute as to who are thelegal representatives of any deceased claimant to the amount), the Commissionermay, after making such inquiry as he may deem fit, make the payment to suchperson as appears to him to be best entitled to receive the amount:
Provided that if the Commissioner is unable todetermine as to who is the person entitled to the amount and considers that thematter could more appropriately be dealt with by the principal civil court oforiginal jurisdiction within the local limits of whose jurisdiction theregistered office of the Company is situated, he may refer such dispute to thesaid court, whose decision thereon shall be final:
Provided further that nothing contained herein shallaffect the liability of any person, who may receive the whole or any part ofthe amount allowed under this Act, to pay the same to the person lawfullyentitled thereto.
7B.Deposit of amount in court: Where any dispute has been referred undersection 7A by the Commissioner to the civil court referred to therein, he shalldeposit the amount in that court.]
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1. Sections 7A and 7B insertedby the Indian Iron and Steel Company (Acquisition of Shares) Amendment Act,1977 (39 of 1977) Section 4.
8.Examination of claims: On receipt of the claims madeunder section 7, the Commissioner shall separately arrange the claims inrelation to preference shares and in relation to the equity shares and examinethe claims in relation to each such share.
9.Admission or rejection ofclaims: (1) After examining the claims,the Commissioner shall fix a certain date on or before which every claimantshall file the proof of his claim or be excluded from the benefit of thedisbursements made by the Commissioner.
(2) Not less than fourteendays’ notice of the date so fixed shall be given by advertisement in one issueof the daily newspaper in the English language and in one issue of such dailynewspaper in the regional language as the Commissioner may consider suitable,and every such notice shall call upon the claimant to file the proof of hisclaim with the Commissioner within the time specified in the advertisement.
(3) Every claimant, who failsto file the proof of his claim within the time specified by the Commissionershall be excluded from the disbursement made by the Commissioner.
(4) The Commissioner shall,after such investigation as may, in his opinion, be necessary, and after givingthe Company an opportunity of refuting the claim and after giving the claimanta reasonable opportunity of being heard, in writing admit or reject the claimin whole or in part.
(5) The Commissioner shall havethe power to regulate his own procedure in all matters arising out of thedischarge of his functions, including the place or places at which he will holdhis sittings and shall, for the purpose of making an investigation under thisAct, have the same powers as are vested in a civil court under the Code ofCivil Procedure, 1908(5 of 1908), while trying a suit, in respect of thefollowing matters, namely: –
(a) the summoning and enforcingthe attendance of any witness and examining him on oath;
(b) the discovery andproduction of any document or other material object producible as evidence;
(c) the reception of evidenceon affidavits;
(d) the issuing of anycommission for the examination of witnesses.
(6) Any investigation beforethe Commissioner shall be deemed to be a judicial proceeding within the meaningof sections 193 and 228 of the Indian Penal Code (45 of 1860) and theCommissioner shall be deemed to be a civil court for the purposes of section345 and Chapter XXVI of the Code of Criminal Procedure, 1973(2 of 1974) .
(7) A claimant, who isdissatisfied with the decision of the Commissioner, may prefer an appealagainst the decision to the principal civil court of original jurisdictionwithin the local limits of whose jurisdiction the registered office of theCompany is situated.
10.Disbursement of money by theCommissioner to claimants: (1) After admitting a claim under this Act, the amount due inrespect of each share acquired by virtue of this Act shall be paid by theCommissioner at the rate of rupees thirty–two and paise seventy–fiveper preference share, and at the rate of rupees four and paise seventy perequity share to the person or persons to whom such sums are due, and on suchpayment, the liability of the Central Government in respect of the share soacquired shall stand discharged.
(2) The Commissioner shall alsoapportion amongst the shareholders, the amount paid to him by way of interestunder sub–section (3) of section 6, and such apportionment shall be madeon the basis of the amount due to each shareholder.
11.Undisbursed or unclaimedamount to be deposited to the general revenue account: Any money paid to theCommissioner which remains undisbursed or unclaimed for a period of **[sixmonths] from the last day on which the disbursement was made, shall betransferred by the Commissioner to the general revenue account of the CentralGovernment; but a claim to any money so transferred may be preferred to theCentral Government by the person entitled to such payment and shall be dealtwith as if such transfer had not been made, the order, if any, for payment ofthe claim being treated as an order for the refund of revenue.
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1. Substituted for the words"three years" by the Indian Iron and Steel Company (Acquisition ofShares) Amendment Act, 1981 (59 of 1981) Section 4.
12.Power of inspection: For the purposes ofascertaining whether any person claiming payment under this Act is a shareholder,the Commissioner shall have the right to –
(a) require any person, havingthe possession, custody or control, of any register or record of the Company,to produce such register or record before the Commissioner.
(b) require any person to makeany statement or furnish any information which may be required by theCommissioner.
CHAPTER III
MISCELLANEOUS
13.Act to have overridingeffect: The provisions of this Actshall have effect notwithstanding anything inconsistent therewith contained inany law, other than this Act, or in any instrument having effect by virtue ofany law, other than this Act.
14.Penalties:If any person, –
(a) makes any claim for anypayment under this Act, knowing or having reason to believe that such claim isfalse or without any basis; or
(b) when required under thisAct so to do, –
(i) omits or fails to produceany register or record of the Company; or
(ii) makes any statement orfurnishes any information which is false in any material particular and whichhe knows or believes to be false or does not believe to be true; or
(c) makes any such statement asaforesaid in any book, account, record, register, return or other document,
he shall be punishable withimprisonment for a term which may extend to two years, or with fine which mayextend to two thousand rupees, or with both.
15.Offences by companies: (1) Where an offence under thisAct has been committed by a company, every person who, at the time the offencewas committed, was in charge of, and was responsible to, the company for theconduct of the business of the company as well as the company, shall be deemedto be guilty of the offence and shall be liable to be proceeded against andpunished accordingly:
Provided that nothing containedin this sub–section shall render any such person liable to anypunishment, if he proves that the offence was committed without his knowledgeor that he had exercised all due diligence to prevent the commission of suchoffence.
(2) Notwithstanding anythingcontained in sub–section (1), where any offence under this Act has beencommitted with the consent or connivance of, or is attributable to any neglecton the part of, any director, manager, secretary or other officer, suchdirector, manager, secretary or other officer shall be deemed to be guilty ofthat offence and shall be liable to be proceeded against and punishedaccordingly.
Explanation: For thepurposes of this section, –
(a) "company" meansany body corporate and includes a firm or other association of individuals; and
(b) "director", inrelation to a firm, means a partner in the firm.
16.Limitation of cognizance ofoffences: No court shall take cognizanceof an offence punishable under this Act, except with the previous sanction ofthe Central Government or of an officer authorised by that Government in thisbehalf.
17.Power to make rules: (1) The Central Government may,by notification, make rules to carry 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 totalperiod of thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediately followingthe session or the successive sessions aforesaid, both Houses agree in makingany modification in the rule or both Houses agree that the rule should not bemade, the rule shall thereafter have effect only in such modified form or be ofno effect, as the case may be; so, however, that any such modification orannulment shall be without prejudice to the validity of anything previouslydone under that rule.
18.Repeal and saving: The Indian Iron and SteelCompany (Acquisition of Shares) Ordinance, 1976(10 of 1976), is herebyrepealed:
Provided that notwithstandingsuch repeal, anything done or any action taken under the said Ordinance shallbe deemed to have been done or taken under the corresponding provision of thisAct.
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