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REGISTERED No. D-(D)-72

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 35] NEW DELHI, WEDNESDAY, NOVEMBER 23, 1977/AGRAHAYANA 2, 1899

Separate paging is given to this Part in order that it may be filed as a separate compilation

LOK SABHA

The following Bill was introduced in Lok Sabha on the 23rd Novem-

ber, 1977: —

BILL NO. 132 OF 1977

A Bill to amend the Indian Iron and Steel Company (Acquisition of

Shores) Act, 1976.

BE it enacted by Parliament in the Twenty-eighth Year of the

Republic of India as follows: —

1. (1) This Act may be called the Indian Iron and Steel Company

(Acquisition of Shares) Amendment Act, 1977.

(2) It shall be deemed to have come into force on the 13th day of

Short title and commence ment.

October, 1977.

Amend- ment 89 of 1976

of sec- 2. In section 2 of the Indian Iron and Steel Company (Acquisition of Shares) Act, 1976 (hereinafter referred to as the principal Act), for clause (h), the following clause shall be substituted, namely: —

tion 2.

'(h) "shareholder" means,—

(i) a person who, immediately before the appointed day, was

registered by the Company as the holder of any shore and in- cludes his legal representative; or

1 of 1956.

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

( 7 2 9)

1 of 1"M (hi) 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, which was executed before the appointed day and delivers such instrument to the Commissioner on or before such date as the Central Government may, by noti- fication, specify in this behalf;',

S. In section 7 of the principal Act, in sub-sectidn (1),—

Amend- ment of •ection 7.

(i) in the opening paragraph, for the words "within thirty days from the specified date", the words, figures and letters "on or before the 30th day of November, 1977" shall be substituted and shall be deemed always to have been substituted;

(ii) for the proviso, the following proviso shall be substituted

and shall be deemed always to have been substituted, namely: —

"Provid°d that if the Commissioner is satisfied that the claimant was prevented by sufficient cause from preferring the claim before the said date, he may entertain the claim within a further period of thirty days from that date and not thereafter.".

4. After section 7 of the principal Act, the following sections shall be

inserted, namely:--

Insertion of new section* 7A and 7B.

"7A. Where there is any dispute as tu the person or persons who are entitled to any amount payable under this Act ('ncludmg 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 ap- pears to him to bo best entitled to receive the amount:

Power of Commis- sioner to inquire Into dis- putes aa to persons entitled to any 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 mare appropriately be dealt with by the principal civil court of original jurisdiction within the local limits of whose jurisdic- tion 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.

Deposit of amount in court.

7B. Where any dispute has been referred under section 7A by the Commissioner to the civil court referred to therein, he shall deposit the amount in that court.".

6 (1) Thr Indian Iron and Steel Company (Acquisition of Shares)

Amendment Ordinance, 1977, is hereby repealed.

lootim Repeal and aavinjj.

(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.

STATEMENT OF OBJECTS AND REASONS

Under the Indian Iron and Steel Company (Acquisition of Shares) Act, 1976, with effect from the 17th July, J.y76, Government acquired the shares of tho Indian Iron and Steel Company Limited, held by- parties other than the State Governments and public sector institutions, in order to enable the Government to make the necessary additional investment in that Company to make it a viable unit

2. According to the definition of the term "shareholder" in the Act, the amount due in respect oi shares was payable only to those persons who immediately before the appointed day (17th July, 1976) were regis- tered by the Indian Iron and Steel Company as the holders of any shares. Representations had been received that on the basis of the existing defi- nition, the amount would not be payable to persons who are holding the shares as on tho appointed day on th'j basis of legal transactions, if they were not registered as the shareholders in the books of the Company es on that date. A^ the shares 0J¹ the Company were listed on the Stock Exchanges, transfer of these shares from one party to another was taking place frequently and these transfers could not be registered in tho Com- pany's books before the appointed day, nor was it necessary that such transfer should be registered immediate^ after the transfer. In order to avoid hardship to genuine holders of the shares, it h proposed that ths* definition of the term "shareholder" should be suitably enlarged so as to include the following categories also: —

(1) persons who, immediately before the appointed day, were registered by the Company as the holder of any share ^nd their legal representatives;

(ii) persons who had acquired a share of the Company and had lodged the instrument of transfer with the Company before the appointed day; and

(iii) any other person claiming in pursuancp of a document duly executed before the appointed day, in the form prescribed for the purpose, under the Companies Act, 1956, and lodged with the Commissioner of Payments on or before such date as the Central Government, may, by notification, specifrv in this be- half.

3. The other proposals connected with the above relate to empower- ing of the Commissioner to inquire into disputes as to the persons entitled to any amount due (which would also enable the Commissioner to refer the matter In certain cases, where he is himself unable to decide that question, to the principal civil court of original jurisdiction within the local limits of whose jurisdiction tho registered office of the Company is situated) and the making of a provision for the deposit of the amount in court where the dispute has been referred to by the Commissioner to a

civil court. Provision has also been made to safeguard the interests of a person lawfully entitled to receive the amount by providing that the liabi- lity of any person who has received the same would still continue as against the person lawfully entitled to receive it.

4. An Ordinance to give effect to the above objects was promulgated

by the President on the 13th day of October, 1977.

5. The Bill seeks to replace that Ordinance.

NEW DELHI;

The Qth November, 1977. BIJU PATNAIK.

PRESIDENT'S RECOMMENDATION UNDER ARTICLE 117 OF THE CONSTITUTION OF INDIA

[Copy of letter No. 8(97)/77-K.T/1943, dated the 11th November, 1977 from Shri Biju Patnaik, Minister of Steel and Mines to the Secretary, Lok Sabha.]

The President, having been informed of the subject matter of the Bill for amendment of Indian Iron and Steel Company (Acquisition of Shares) Act, 1976, has recommended under article 117(1) and (3) of the Constitu- tion, the introduction in and consideration by Lok Sabha of the said Bill.

FINANCIAL MEMORANDUM

According to the definition of the term "Shareholder" in the Indian Ifon and Steel Company (Acquisition ot Shares) Act, 1976, the amount due in respect 01 shares was payable only to those persons whose shares were acquired by Government on 17-7-1976 and who were registered on that date in the books of Indian Iron and Steel Company as the holders of such shares. The amount would not, therefore, be payable to persona who were not registered as such even though they had acquired the shares as on 17-7-1976, legally. The Bill seeks to provide for the amend- ment of the definition of the term "Shareholder" in the Act to provide that the following categories of persons are also paid the amount, namely:—

(i) legal representatives of shareholders as defined in the exist- ing Act;

(u) a person who had acquired shares of the company and had lodged the instrument of transfer with the company before 17-7-1976; and

(tit) a person who claims under a proper instrument of transfer of any share in the prescribed form and executed before 17-7-1976 and lodged with the Commissioner of Payments on or before such date as the Central Government mey by notification specify in this behalf.

2. The amount at the rates stipulated in the Act, namely, at the

mte of Rs. 4.70 for each equity share of the face value of Rs. 10 and at the rate of Rs. 32.75 for each preference share of the face value of Rs. 100 would, therefore, be payable to all those persons who held the sharea of IISCO m a lawful manner as on 17-7-1976 and whose shares were aoquired

3. The total amount paid to the Commissioner of Payments for dis- bursement to the shareholders whose shares were acquired was deter- mined with reference to the total number of shares acquired by Govern- ment and not with reference to whether they were actually registered as shareholders in the Books of the company as on 17-7-1976 There would, therefore, be no further outgo of expenditure trom the Consolidated Fund of India as a result of the proposed amendment

4. However, but for the enlargement of the definition of the expression Shareholder" by the proposed amending legislation, the undisbursed amount lying with the Commissioner, would normally have gone back to the Government and, to this extent, this could technically by deemed "to be a loss to the Government.

Memorandum expZaimng the modifications contained in the Bill to replace the Indian Iron and Steel Company (Acquisition 0/ Shares) Amendment Ordinance, 1977

Apart from changes of a formal drafting nature, references in new sections 7A and 7B {vide clause 4 of the Bill) to compensation have been changed into references to amount payable under the Act to conform to the language of section 10 of the Act.

AVTAH SINGH RIKHY,

Secretary.

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