THE BRITISH INDIA CORPORATION LIMITED (ACQUISITION OF SHARES) ACT, 1981 
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ARRANGEMENT OF SECTIONS 
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CHAPTER I 

PRELIMINARY 

SECTIONS 

1.  Short title and commencement. 
2.  Definitions. 

CHAPTER II 

ACQUISITION OF THE SHARES OF THE COMPANY 

3.  Transfer and vesting of shares of the Company in the Central Government. 
4.  Management of the Company. 
5.  Payment of amounts. 
6.  Appointment of Commissioner of Payments. 
7.  Payment by the Central Government to the Commissioner. 
8.  Claims to be made to the Commissioner. 
9.  Examination of claims. 
10.  Admission or rejection of claims. 
11.  Disbursement of money by the Commissioner to claimants. 
12.  Undisbursed or unclaimed amount to be deposited to the general revenue account. 
13.  Power of inspection. 
14.  Power of Commissioner to inquire into disputes as to amount. 
15.  Deposit of amount in court. 

CHAPTER III 

MISCELLANEOUS 

16.  Act to have overriding effect. 
17.  Penalties. 
18.  Offences by companies. 
19.  Limitation of cognizance of offences. 
20.  Power to make rules. 
21.  Repeal and saving. 

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THE BRITISH INDIA CORPORATION LIMITED (ACQUISITION OF SHARES) ACT, 1981 

ACT NO. 29 OF 1981 

[11th September, 1981.] 

An Act to provide for the acquisition of certain shares of the British India Corporation Limited 
with  a  view  to  securing  the  proper  management  of  the  affairs  of  the  Company  and  the 
continuity  and  development  of  the  production  of  goods  which  are  vital  to  the  needs  of  the 
country and for matters connected therewith or incidental thereto. 

WHERE  AS  Messrs. British India  Corporation Limited, Kanpur, are engaged in the manufacture and 

production of pure and blended woollen fabrics which are vital to the needs of the general public; 

AND WHEREAS as a result of an investigation made under section 15 of the Industries (Development 
and Regulation) Act, 1951 (65 of 1951), certain directions were issued to the Company under section 16 
of that Act which, inter alia, included the modernisation of the plant and machinery of the undertakings 
of the Company; 

AND  WHEREAS  for  the  purpose  of  carrying  out  the  said  directions,  public  financial  institutions  had 

advanced large sums of money to the Company; 

AND  WHEREAS  the  Central  Government  and  certain  public  financial  institutions  have  also  invested 

considerable funds in the share capital of the Company; 

AND WHERE AS the State Bank of India has advanced considerable sums to the Company and a part 

thereof has been guaranteed by the Central Government; 

AND  WHEREAS  further  investment  of  large  sums  of  money  is  necessary  for  the  maintenance  and 
development  of  the  production  of  the  undertakings  of  the  Company  and  for  securing  the  proper 
management of the affairs of the Company; 

AND WHEREAS acquisition by the Central Government of an effective control over the affairs of the 

Company is necessary to enable it to make the investments aforesaid; 

BE it enabled by Parliament in the Thirty-second Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  British  India  Corporation 

Limited (Acquisition of Shares) Act, 1981. 

(2) It shall be deemed to have come into force on the 11th day of June, 1981. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “appointed day” means the 11th day of June, 1981; 

(b)  “bank”  means  a  banking  company  within  the  meaning  of  the  Banking  Regulation                  

Act, 1949 (10 of 1949); 

(c) “Commissioner” means the Commissioner of Payments appointed under section 6; 

(d) “Company” means British India Corporation Limited,being a company within the meaning of 
the Companies Act, 1956 (1 of 1956), and having its registered office at Sutherland House, Kanpur, 
in the State of Uttar Pradesh; 

(e) “notification” means a notification published in the Official Gazette; 

(f)  “share”  means  a  share,  whether  ordinary  or  preference,  in  the  capital  of  the  Company,  and 
includes a share pledged by any shareholder with any bank or other creditor, but does not include any 
share in the capital of the Company held by— 

(i) the Central Government; 

(ii) any State Government; 

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(iii) the State Bank of India, established under section 3 of the State Bank of India Act,1955 

(23 of 1955), and its subsidiary banks; 

(iv) the Life Insurance Corporation of India, established under section 3 of the Life Insurance 

Corporation Act, 1956 (31 of 1956); 

(v) the Unit Trust of India, established under section 3 of the Unit Trust of India Act, 1963 

(52 of 1963); 

(vi) any corresponding new bank, within the meaning of the Banking Companies (Acquisition 

and Transfer of Undertakings) Act, 1970 (5 of 1970); 

(vii)  any  corresponding  new  bank,  within  the  meaning  of  the  Banking  Companies 

(Acquisition and Transfer of Undertakings) Act,1980 (40 of 1980); 

(viii)  any  general  insurance  company  nationalised  by  the  General  Insurance  Business 

(Nationalisation) Act, 1972 (57 of 1972); 

(g) “shareholder” means,— 

(i) a person who, immediately before the appointed day, was registered by the Company as 

the holder of any share and includes his legal representative; or 

(ii)  a  person  who,  before  the  appointed  day,  had  lodged  with  the  Company  a  proper 
instrument  of transfer  of  any  share  in  the  form  prescribed  under  section  108  of  the  Companies 
Act, 1956 (1 of 1956), and executed in accordance with the provisions of that section; or 

(iii)  a  person  who  claims  under  a  proper  instrument  of  transfer  of  any  share  in  the  form 
prescribed  under  section  108  of  the  Companies  Act,  1956  (1  of  1956),  and  delivers  such 
instrument  to  the  Commissioner,  duly  executed,  on  or  before  such  date  as  the  Central 
Government may, by notification, specify in this behalf; 

(h)  “specified  date”  means  such  date  as  the  Central  Government  may,  for  the  purpose  of  any 
provision  of  this  Act,  by  notification,  specify  and  different  dates  may  be  specified  for  different 
provisions of this Act; 

(i) words and expressions used herein and not defined but defined in the Companies Act,1956 (1 

of 1956), have the meanings respectively assigned to them in that Act. 

CHAPTER II 

ACQUISITION OF THE SHARES OF THE COMPANY 

3.  Transfer  and  vesting  of  shares  of  the  Company  in  the  Central  Government.—(1)  On  the 
appointed day, all the shares of the Company shall, by virtue of this Act, stand transferred to, and vest in, 
the Central Government. 

(2) The Central Government shall be deemed, on and from the appointed day, to have been registered 
in the Register of members of the Company as the holder of each share which stands transferred to, and 
vested in, it by virtue of the provisions of sub-section(1). 

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

(4)  For  the  removal  of  doubts,  it  is  hereby  declared  that  the  provisions  of  sub-sections  (1)  and  (2) 

shall not be deemed to affect— 

(a)  any  right  of  the  Company  subsisting,  immediately  before  the  appointed  day,  against  any 
shareholder to recover from such shareholder any sum of money on the ground that the shareholder 
has not paid or credited to the Company the whole or any part of the value of the shares held by him, 
or on any other ground whatsoever; or 

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(b)  any  right  of  the  shareholder  subsisting,  immediately  before  the  appointed  day,  against  the 

Company to receive any dividend or other payment due from the Company. 

4.  Management  of  the  Company.—For  the  purpose  of  enabling  the  Company  to  function  as  a 
Government  company,  the  Central  Government  may,  by  notification,  make  such  provisions  (including 
changes in the Board of Directors, and amendments in the memorandum and articles of association, of the 
Company)  as  it  may  consider  necessary  and  the  provisions  so  made  shall  have  effect  notwithstanding 
anything contained in the Companies Act, 1956 (1 of 1956). 

5.  Payment  of  amounts.—(1)  For  the  transfer  to,  and  vesting  in,  the  Central  Government,  under 
section  3,  of  the  shares  of  the  Company,  there  shall  be  given  by  the  Central  Government  to  the 
shareholders  of  the  Company,  in  cash  and  in  the  manner  specified  in  section  7,  an  amount  of  rupees 
twenty-two lakhs and sixty thousand. 

(2) The amount, referred to in sub-section (1), shall carry simple interest at the rate of four percent. 
per annum for the period commencing on the appointed day and ending on the date on which payment of 
such amount is made by the Central Government to the Commissioner. 

6.  Appointment  of  Commissioner  of  Payments.—(1)  The  Central  Government  shall,  for  the 
purpose  of  disbursing  the  amounts  payable  to  shareholders  of  the  Company  under  section  5,  by 
notification, appoint a Commissioner of Payments. 

(2)  The  Central  Government  may  appoint  such  other  persons  as  it  may  think  fit  to  assist  the 
Commissioner  and  thereupon  the  Commissioner  may  authorise  one  or  more  of  such  persons  also  to 
exercise  all  or  any  of  the  powers  exercisable  by  him  under  this  Act,  and  different  persons  may  be 
authorised to exercise different powers. 

(3)  Any  person  authorised  by  the  Commissioner  to  exercise  any  of  the  powers  exercisable  by  the 
Commissioner may exercise those powers in the same manner and with the same effect as if they have 
been conferred on that person directly by this Act, and not by way of authorisation. 

(4) The salaries and allowances of the Commissioner and other persons appointed under this section 

shall be defrayed out of the Consolidated Fund of India. 

7.  Payment  by  the  Central  Government  to  the  Commissioner.—(1)  The  Central  Government 
shall,  within  thirty  days  from  the  specified  date,pay,  in  cash,  to  the  Commissioner,  for  payment  to  the 
shareholders of the Company,— 

(a) an amount equal to the amount specified in sub-section (1) of section 5; and 

(b) an amount equal to the amount determined under sub-section (2) of section 5. 

(2) A deposit account shall be opened by the Central Government in favour of the Commissioner, in 
the  Public  Account  of  India,  and  every  amount  paid  under  this  Act  to  the  Commissioner  shall  be 
deposited by him to the credit of the said deposit account and the said deposit account shall be operated 
by the Commissioner. 

(3) The interest  accruing  on  the  amount  standing  to  the  credit  of the  deposit  account referred to  in 

sub-section (2), shall enure to the benefit of the shareholders of the Company. 

8. Claims to be made to the Commissioner.—(1) Every shareholder, having a claim in relation to 
any share acquired by this Act, shall prefer such claim before the Commissioner within thirty days from 
the specified date: 

Provided  that  if  the  Commissioner  is  satisfied  that  the  claimant  was  prevented  by  sufficient  cause 
from  preferring  theclaim  within  the  period  of  thirty  days,  he  may  entertain  the  claim  within  a  further 
period of thirty days and not thereafter. 

(2) Every shareholder of a preference share shall have a preferential claim with regard to the amount 

paid by the Central Government to the Commissioner. 

9. Examination of claims.—On receipt of the claims made under section 8, the Commissioner shall 
separately  arrange the claims  in  relation to  preference  shares  and  in relation  to the  ordinary  shares  and 
examine the claims in relation to each such share. 

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10. Admission or rejection of claims.—(1) After examining the claims, the Commissioner shall fix a 
certain date on or before which every claimant shall file the proof of his claim or be excluded from the 
benefit of the disbursements made by the Commissioner. 

(2)  Not less  than  fourteen days’  notice  of  the  date  so  fixed shall  be  given  by  advertisement  in  one 
issue of daily newspaper in the English language and in one issue of such daily newspaper in the regional 
language as the Commissioner may consider suitable, and every such notice shall call upon the claimant 
to file the proof of his claim with the Commissioner within the time specified in the advertisement. 

(3)  Every  claimant,  who  fails  to  file  the  proof  of  his  claim  within  the  time  specified  by  the 

Commissioner, shall be excluded from the disbursements made by the Commissioner. 

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary, and after 
giving  the  Company  an  opportunity  of  refuting  the  claim  and  after  giving  the  claimant  a  reasonable 
opportunity of being heard, in writing, admit or reject the claim in whole or in part. 

(5) The Commissioner shall have the power to regulate his own procedure in all matters arising out of 
the discharge of his functions, including the place or places at which he will hold his sittings and shall, for 
the purpose of making an investigation under this Act, have the same powers as are vested in a civil court 
under  the  Code  of  Civil  Procedure,  1908  (5  of  1908),  while  trying  a  suit,  in  respect  of  the  following 
matters, namely:— 

(a) the summoning and enforcing the attendance of any witness and examining him on oath; 

(b)  the  discovery  and  production  of  any  document  or  other  material  object  producible  as 

evidence; 

(c) the reception of evidence on affidavits; 

(d) the issuing of any commission for the examination of witnesses. 

(6) Any investigation before the Commissioner shall be deemed to be a judicial proceeding within the 
meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Commissioner shall be 
deemed to be a civil court for the purposes of section 345 and Chapter XXVI  of the Code of Criminal 
Procedure, 1973 (2 of 1974). 

(7)  A  claimant,  who  is  dissatisfied  with  the  decision  of  the  Commissioner,  may  prefer  an  appeal 
against  the  decision  to  the  principal  civil  court  of  original  jurisdiction  within  the  local  limits  of  whose 
jurisdiction the registered office of the Company is situated. 

11.  Disbursement  of  money  by  the  Commissioner  to  claimants.—(1)  After  admitting  a  claim 
under this Act, the amount due in respect of each share acquired by virtue of this Act shall be paid by the 
Commissioner  at  the  rate  of  rupees  ten  per  preference  share,  and  at  the  rate  of  fifty  paise  per  ordinary 
share  to  the  person  or  persons  to  whom  such  sums  are  due,  and  on  such  payment,  the  liability  of  the 
Central Government in respect of the share so acquired shall stand discharged. 

(2) The Commissioner shall also apportion amongst the share-holders, the amount paid to him by way 
of interest under sub-section (3) of section 7, and such apportionment shall be made on the basis of the 
amount due to each shareholder. 

12.  Undisbursed  or  unclaimed  amount  to  be  deposited  to  the  general  revenue  account.—Any 
money  paid  to  the  Commissioner  which  remains  undisbursed  or  unclaimed  on  the  date  immediately 
preceding the date on which the office of the Commissioner is finally wound up, shall be transferred by 
the  Commissioner  before  his  office  is  finally  would  up  to  the  general  revenue  account  of  the  Central 
Government; but a claim to any money so transferred may be preferred to the Central Government by the 
person entitled to such payment and shall be dealt with as if such transfer had not been made, the order, if 
any, for payment of the claim being treated as an order for the refund of revenue. 

13.  Power  of  inspection.—For  the  purposes  of  ascertaining  whether  any  person  claiming  payment 

under this Act is a shareholder, the Commissioner shall have the right to— 

(a) require any person, having the possession, custody or control, of any register or record of the 

Company, to produce such register or record before the Commissioner, 

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(b) require any person to make any statement or furnish any information which may be  required 

by the Commissioner. 

14. Power of Commissioner to inquire into disputes as to amount.—Where there is any dispute as 
to the person or persons who are entitled to any amount payable under this Act (including any dispute as 
to  who  are  the  legal  representatives  of  any  deceased  claimant  to  the  amount),  the  Commissioner  may, 
after making such inquiry as he may deem fit, make the payment to such person as appears to him to be 
best entitled to receive the amount: 

Provided  that  if  the  Commissioner  is  unable  to  determine  as  to  who  is  the  person  entitled  to  the 
amount  and  considers  that  the  matter  could  more  appropriately  be  dealt  with  by  the  principal  civil  of 
original jurisdiction within the local limits of whose jurisdiction the registered office of the Company is 
situated, he may refer such dispute to the said court, whose decision thereon shall be final: 

Provided  further  that  nothing  contained  herein  shall  affect  the  liability  of  any  person,  who  may 
receive the whole or any part of the amount allowed under this Act, to pay the same to the person lawfully 
entitled thereto. 

15.  Deposit  of  amount  in  court.—Where  any  dispute  has  been  referred  under  section  14  by  the 

Commissioner to the civil court referred to therein, he shall deposit the amount in that court. 

CHAPTER III 

MISCELLANEOUS 

16.  Act  to  have  overriding  effect.—The  provisions  of  this  Act  shall  have  effect  notwithstanding 
anything  inconsistent  therewith  contained  in  any  law,  other  than  this  Act,  or  in  any  instrument  having 
effect by virtue of any law, other than this Act. 

17. Penalties.—If any person,— 

(a) makes any claim for any payment under this Act, knowing or having reason to believe that 

such claim is false or without any basis; or 

(b) when required under this Act so to do,— 

(i) omits or fails to produce any register or record of the Company; or 

(ii) makes any statement of furnishes any information which is false in any material particular 

and which he knows or believes to be false or does not believe to be true; or 

(c) makes any such statement as aforesaid in any book, account, record, register, return or other 

document, 

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

18.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company,  every  person  who,  at  the  time  the  offence  was  committed,  was  in  charge  of,  and  was 
responsible to, the company for the conduct of the business of the company as well as the company, shall 
be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment, if he proves that the offence was committed without his knowledge or that he had exercised 
all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been 
committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, 
manager, secretary or other officer, such director, manager, secretary or other officer shall be deemed to 
be guilty of that offence and shall be liable to be proceeded against the punished accordingly. 

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Explanation.—For the purposes of this section,— 

(a) “company” means any body corporate and includes a firm or other association of individuals; 

and 

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

19. Limitation of cognizance of offences.—No court shall take cognizance of an offence punishable 
under this Act, except with the previous sanction of the Central Government or of an officer authorised by 
that Government in this behalf. 

20. 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 the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall 
thereafter have affect only in such modified form or be no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that rule. 

21. Repeal and saving.—(1) The British India Corporation (Acquisition of Shares) Ordinance, 1981 

(5 of 1981), is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the Ordinance so repealed 

shall be deemed to have been done or taken under the corresponding provisions of this Act. 

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