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

Scinde Railway Company

Acts Covered: Scinde Railway Act 1857 (20 & 21 Vict. c.clx)
Scinde Railway Company's Amalgamation Act 1869 (32 & 33 Vict. c.lxxx)
Scinde, Punjaub and Delhi Railway Purchase Act 1886 (49 & 50 Vict. c.xlii)

Background

1. The Scinde Railway Company was first established by deed of settlement in March 1855 and incorporated by Act of Parliament in July 1855. The company contracted with the Government of India to construct a line between Karachi (formerly Kurraches) and Kotree. The company was granted a 5% return on investment up to a maximum of £1 million in order to build the 120-mile line.

2. Work commenced in April 1858 and the line opened in May 1861. The company was involved in a number of additional railway line projects, as well as the establishment of a steam flotilla on the river Indus, after an Act of 1857 which granted it the opportunity to extend its operations.

3. In 1870, the Scinde Railway Company was amalgamated with the Scinde andRailway Company and renamed the Sind, Punjaub and Delhi Railway. In 1886, the contracts expired and responsibility for the railway was transferred entirely to the Indian government. The government merged the Sind, Punjaub and Delhi Railway with other smaller state-owned railways to create the North State Western Railway.[463]

4. It is not clear what happened to the company after the transfer of its undertakings to the Indian government; it is likely that it was dissolved. The archives of the Board of Trade contain records relating to the company, although nothing indicating its dissolution.[464] The company is no longer registered at Companies House as an active company, nor are there any indications that it remains in existence.

5. Four Acts relating to the Scinde Railway Company were promoted over the lifetime of the company:

  • Scinde Railway Act 1855
  • Scinde Railway Act 1857
  • Scinde Railway Company's Amalgamation Act 1869
  • Scinde, Punjaub and Delhi Railway Purchase Act 1886.

The 1855 Act was repealed by the 1857 Act. The remaining three Acts are proposed for repeal in the following note.

Scinde Railway Act 1857 (20 & 21 Vict. c.clx) - Purpose

6. The Scinde Railway Company was "provisionally formed" in the City of London, during March 1855, for the purpose of constructing railways in India.[465] The company was authorised to acquire and hold lands "in the East Indies and Great Britain" and to build and operate one or more railways, starting with a line running from Kurrachee (a seaport, now called Karachi in Pakistan) to Hydrabad (now Hyderabad).[466]

7. In July 1855, negotiations were in progress between the railway company and the East India Company for the construction of the first line in Scinde, but before an agreement could be concluded the railway company needed statutory incorporation and additional powers. To this end, the company sought what was to become the 1855 Act.[467] The purpose of that Act (put broadly) was:

(a) to incorporate the Scinde Railway Company (so that it could construct and operate railways in India, including extensions and branches, in concert with the East India Company) with perpetual succession and the ability to acquire and hold lands both in India and in England;[468]

(b) to vest automatically in the new railway company all the property and documentation belonging to its predecessor company, and to transfer both the benefits and liabilities under all existing contracts (and all rights of action) to the new company;[469]

(c) to authorise the new company to enter into arrangements with the East India Company (the latter acting for the government of India) for the construction, maintenance and working of railways and telegraphs in India, which arrangements would provide a raft of rights to the East India Company relating, for example, to the use of "tolls, receipts, and profits", to rights of supervision and control over the railway company and its affairs both in England and elsewhere, to the appointment of an ex officio director with a right of veto and of agents, and to "the surrender or sale to the East India Company, or to any other person or persons, of the said railway or railways or any part thereof ... at any future period";[470]

(d) to authorise the railway company to increase its capital by issuing additional £20 shares, and to issue debentures convertible into shares;[471]

(e) to permit the company's board to establish offices in India for the issue, transfer and registration of shares and other securities, and to make regulations for, and to appoint staff (with delegated powers) to handle, such transactions;[472]

(f) to maintain various registers at the Indian office (or offices) relating to share and security transactions, and "from time to time" to copy the register entries to the railway company's "principal office" in England;[473] and

(g) to make provision for certain ancillary matters.[474]

8. The 1855 Act was repealed (albeit with savings) fairly shortly after it was enacted. The Scinde Railway Act 1857 provided that:

On the passing of this [1857] Act, but subject to the provisions thereof, the recited Deed of Settlement [of March 1855] is by this Act annulled, and the recited [1855] Act is by this Act repealed.[476]

9. Under the 1855 Act and the deed of settlement, the railway company's capital had an initial ceiling (fixed at £750,000, to be raised by the issue of £20 shares), but with power vested in the company to increase the capital "by such an amount as might be deemed necessary" through a new share issue.[477] In December 1855 the railway company had agreed with the East India Company that the former would construct and open a line from Kurrachee to Hyderabad on the river Indus (today in Pakistan), on land to be provided by the latter, and that the railway company would lodge with the East India Company the construction moneys, which would be drawn upon as the need arose. On completion of "the Scinde Railway", the line would be leased by the East India Company to the railway company for a term of 99 years (expiring in 1954, although terminable before that date). During this period the East India Company would pay interest (at 5% p.a.) on the moneys lodged with it.

10. By 1857, preliminary surveys had been undertaken, and construction was about to commence. The railway company had raised £500,000 capital. It was also negotiating with the East India Company to build a second line from Mooltan (now Multan) to Lahore and Umritsir (now Amritsar) ("the Punjaub Railway"), and to put in place a steam boat connection on the Indus river ("the Indus Steam Flotilla") between Hyderabad and Mooltan.[478]

11. In order to achieve these projects, and to regulate the company's capital, the railway company needed additional statutory powers (which would both supersede the 1855 Act and deed, and re-enact some of the earlier powers, albeit in amended form). To this end the railway company promoted what was to become the 1857 Act.[479] The principal purposes of the 1857 Act were (put broadly) these:

(a) to ensure that the railway company remained incorporated, with all the attributes that entailed, including the ability to hold land lands both in England (up to 2 acres) and in India (unlimited), to work various railways, to build and employ "steam boats and other vessels", to work mineral mines and operate ancillary manufacturing works,[480] and to retain all its legally-held property (both moveable and immovable);[481]

(b) to provide a general saving for all rights, liabilities and actions incurred under previous authorisations, including: all contracts, acquisitions and securities issued;[482] all share certification and dealings;[483] all legal proceedings by or against the railway company;[484] all existing obligations to pay share subscriptions and to honour debts;[485] all binding meeting and board resolutions;[486] and various other issues;[487]

(c) to authorise the railway company to enter into contracts with the East India Company for a range of matters, including: the construction and operating of the Scinde and the Punjaub Railways (or "any other railway or railways in India") and related works; the provision of "steam boats and other vessels"; the acquisition of land; the securing of guarantees of interest on capital from, and the granting of significant rights to, the East India Company; and the selling "at any future period" (either to the East India Company or to any other body) of the railway undertaking, "the winding-up of the affairs of the company, and the distribution of the net assets of the company";[488]

(d) to authorise the railway company to raise additional general capital by the creation of new shares for its various enterprises (including those sanctioned by the East India Company),[489] and to issue those shares under seal and in distinctive form;[490]

(e) to require the railway company to keep separate capital and revenue accounts for each of its development projects;[491]

(f) to authorise the railway company to borrow on bond, in connection with the two railway and the flotilla projects, up to a set ceiling;[492]

(g) to regulate shareholders' meetings, the appointment of directors and auditor, and the functioning of company committees;[493]

(h) to authorise the railway company to establish share and bond issuing and registration offices in India;[494] and

(i) to provide for miscellaneous matters.[495]

Status of the 1857 Act

12. The 1857 Act superseded the 1855 Act and the railway company's source document, the deed of settlement. The Act repealed the earlier legislation, incorporated savings provisions, and re-enacted some of the previous provisions in a broader format so that the railway company could proceed with three development projects rather than the sole project envisaged at the outset. In particular, the reconfigured operation allowed the railway company to raise considerably more working capital, subject to control by the East India Company.

13. The Scinde Railway Company later amalgamated to form the Scinde, Punjaub and Delhi Railway Company, and eventually the combined operation vested in the Secretary of State in Council of India (leaving the company to be formally dissolved - which probably occurred in or about 1886).

14. The 1857 Act is now spent and may be repealed in whole.

Extent

15. The 1857 Act related principally to the affairs of the Scinde Railway Company, which was responsible for the construction and operation of the Scinde railway and the Punjaub railway. The company operated in British India (in the north-west territory and in the Bombay presidency) and in England (in London).

16. The Act applied to Great Britain and to what today are the nations of Pakistan and India (in the state of Punjab).

Scinde Railway Company's Amalgamation Act 1869 (32 & 33 Vict. c.lxxx) - Purpose

17. In February 1859, the Scinde Railway Company had contracted with the Secretary of State in Council of India (as successor to the East India Company in its governmental role)[496] to establish and operate the Indus steam flotilla, subject to terms and conditions which were similar to those in the December 1855 contract relating to the Scinde railway, and which included eventual sale.[497] In March 1859, the same parties entered into a contract whereby the railway company would construct and maintain the Punjaub railway, again on like terms and conditions.[498] As with the Scinde railway[499] and the Indus steam flotilla operation, provision was made for the surrender and sale of the Punjaub railway to the Secretary of State.

18. In June 1863, the parties entered into a further contract whereby the railway company would build a third railway line ("the Delhi railway"), this time running from Umritsir (now Amritsar) to Delhi (or nearby). The terms and conditions were similar to its predecessors (and, more particularly, the Scinde railway contract of 1855), and again provided for sale and transfer to the Secretary of State, under the valuation formula, but with the option deferred until either 1888 (25 years later) or 1913 (50 years later).[501]

19. By 1869, the railway company had raised capital (by the issue of stocks and shares) and borrowed on debentures and bonds for the three ventures, and had "constructed and opened for traffic" parts of the four undertakings.[502] The railway company had now reached the point where it was "expedient to amalgamate their said separate undertakings or any two or more thereof for the time being into one united undertaking".[503] This, and various ancillary steps, required further statutory authority.[504] The purposes underpinning the 1869 Act were:

(a) to authorise the railway company (with the sanction of the Secretary of State and the approval of the shareholders) to amalgamate its separate operational holdings into one or more "united undertaking[s]";[505]

(b) to regulate the holding of shares in the railway company,[506] to regulate the holding and raising of capital,[507] and to authorise the issuing of "consolidated stock";[508]

(c) to authorise borrowing by the railway company on bond (but not on mortgage) up to a fixed ceiling;[509] (d) to authorise the railway company to enter into contracts with the Secretary of State for various additional purposes relating to the united undertakings;[510]

(e) to authorise the railway company to issue debenture stock for any united undertaking;[511] and

(f) to make provision for certain miscellaneous matters.[512]

Status of the 1869 Act

20. The principal purpose behind the 1869 Act was to facilitate the amalgamation and consolidation of the Scinde Railway Company's various operations in a way which did not detract from the powers previously granted in 1857. The long-term aim remained the purchase of the undertakings by the Secretary of State (on behalf of the government of India).

21. The 1869 Act was to be read in conjunction with the 1857 Act, and (like the 1857 Act) has not been the subject of amendment or of partial repeal.

22. In 1886, the assets of the combined railway company vested in the Secretary of State in Council of India, and the railway company was probably formally dissolved in or about that year.

23. The 1869 Act is now spent and may be repealed in whole.

Extent

24. The 1869 Act related principally to the affairs of the Scinde, Punjaub and Delhi Railway Company, which was responsible for the construction and operation of the three railway undertakings and an inter-linking river flotilla. The company operated in British India (in the north-west territory, surrounding Lahore, and in the Bombay presidency) and in England (in London).

25. The Act applied to Great Britain and to what today are the nations of Pakistan and India (in the states of Punjab and Haryana).

Scinde, Punjaub and Delhi Railway Purchase Act 1886 (49 & 50 Vict. c.xlii) - Purpose

26. Following enactment of the 1869 Act, a special general meeting of shareholders (held at Bishopsgate Street in London) resolved in May 1870 to amalgamate the separate transport undertakings with effect from July of that year, and to change the name of the railway company to the Scinde, Punjaub and Delhi Railway Company.[513]

27. The amalgamation was prefaced by a series of changes to the contractual arrangements already in place between the railway company and the Secretary of State. In particular, the June 1870 contract provided that the Secretary of State could "give notice to the company, in London and at Lahore, of his intention to purchase on behalf of Her Majesty, for the purposes of the Government of India" the various railways, flotilla, works and all the plant (including rolling stock) and infrastructure,[514] which option would become operable at break points of 25 and 50 years within the life of the new 99 year lease.

28. Under the previous contractual arrangements, on such purchase the Secretary of State was required to pay a lump sum "out of the revenues of India" reflecting the "mean market value in London" of the aggregate of the railway company's shares and capital stock, and to indemnify the company against all previously sanctioned liabilities. Under the new contract the Secretary of State was entitled to opt to pay the purchase price by annuity rather than by a "gross sum of money", spread across the remainder of the 99 year term and payable in twice-yearly instalments.[515]

29. By 1886, the amalgamated railway company had constructed the whole railway network (which it was now working) and the steam flotilla operation (which it had ceased to work). The total capital raised by the company stood at just over £11 million (held mainly through capital stock), and the company no longer owed any moneys "on debentures, bonds, or other securities".[516] In March 1885, the Secretary of State had given notice of his intention to purchase the whole railway and flotilla undertaking from December of that year, using an annuity expiring in 1959 (at a valuation figure of approximately £14 million).

30. The next steps were to create a sinking fund (for such shareholders who wanted to exchange their holdings for annuities with a sinking fund attached), to establish arrangements for annuity management and for pension payments to certain company employees, to make contingency provision relating to current legal proceedings, to provide for certain residuary property which was not to pass to the Secretary of State,[517] and to make provision for the "widows' orphan and benevolent fund" (set up for company employees in India), all of which required additional statutory authority. To this end, the railway company promoted the 1886 Act[518] which, in broad terms, was designed:

(a) to require the transfer to, and the vesting in, the Secretary of State in December 1885, of the undertaking and property of the railway company (together with a transfer of all debts and liabilities incurred with the sanction of the East India Company or the Secretary of State), on the basis that the Secretary of State would cease to have any claim against the company in respect of previous interest advances, principal payments and the like;[519]

(b) to declare that the £571,828 14s annuity created by the Secretary of State (pursuant to the 1870 contract), and expiring on 31 December 1958, should have "all the incidents of personal estate",[520] and that it was to be payable from "the revenues of India, in like manner as other liabilities incurred on account of the Government of India";[521]

(c) to prescribe the manner of payment and distribution (including apportionment) of the annuity;[522]

(d) to create a sinking fund, and to take the necessary preliminary steps (involving the division of the annuity-holders into two classes, A and B, the latter annuitants having opted to receive their payments net of deductions towards the fund);[523]

(e) to make provision for the holding and management of the annuities;[524]

(f) to require the payment of pensions to certain salaried employees "by way of compensation for the loss of [their] office" on a scale commensurate with length of service;[525]

(g) to provide for the railway company being "finally and completely wound up and dissolved";[526] and

(h) to cater for various ancillary matters.[527]

Status of the 1886 Act

31. The principal purpose behind the 1886 Act was (as its short title implies) to lay the ground for the acquisition by the Secretary of State of the amalgamated railway company's undertaking on behalf of the government of India. In so doing, it made provision for the creation of a sinking fund and for the eventual dissolution of the corporate body.

32. The 1886 Act was the last in a series of three statutes governing the railway company's operation and its dealings with the Secretary of State. The Act was later neither amended nor repealed in part.

33. The Scinde, Punjaub and Delhi Railway Company was probably eventually dissolved in or about 1886.

34. The 1886 Act is now spent and may be repealed in whole.

Extent

35. The 1886 Act related to the affairs of the amalgamated Scinde, Punjaub and Delhi Railway Company. That company operated in British India (in the northwest territory, surrounding Lahore, and in the Bombay presidency) and in England (in London).

36. The Act applied to Great Britain and to what today are Pakistan and India (in the states of Punjab and Haryana).

Consultation

37. 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, the High Commission of Pakistan, 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. [463] For further information see Ghosh, S. Railways in India - A Legend (2002) Jogemaya Prokashani, Kolkata; Malik, M. K. B. on behalf of the Railway Board, Government of Pakistan, Hundred Years of Pakistan Railways (1962) Oxford University Press, Pakistan.

  2. [464] The records reside at the National Archives, under reference number BT41/620/3389. They throw no light on the maturing of the sinking fund set up under the legislation.

  3. [465] Preamble to the Scinde Railway Act 1855 (18 & 19 Vict. c.cxv) ("the 1855 Act"), being "An Act for incorporating the Scinde Railway Company, and for other Purposes connected therewith". The short title of the 1855 Act had been assigned by section 1. The 1855 Act was, subject to certain savings, wholly repealed two years later by the Scinde Railway Act 1857, s 5 (see below). The initial formation of the railway company had been by deed of settlement, and the company was first registered as a joint stock company in accordance with the Joint Stock Companies Acts 1844 (7 & 8 Vict. cc.110, 111) (later repealed by the Companies Act 1862, c.89).

  4. [466] The 1855 Act, preamble. Both Kurrachee and Hydrabad were in "the Province of Scinde". The company was also empowered to work coal, iron and other ore mines in the East Indies and, from the raw materials, to manufacture products for the railway and for sale (where surplus to requirements), using "works, furnaces, forges, smelting houses, and gasworks": ibid.

  5. [467] The 1855 Act, s 20 provided that the costs of obtaining the legislation were to be paid by the railway company.

  6. [468] The 1855 Act, s 3. By section 5, the new company was to continue to be regulated by the 1855 deed of settlement, except insofar as its provisions were varied by the 1855 Act or by the Companies Clauses Consolidation Act 1845 (8 & 9 Vict. c.16), relating, for example, to byelaws, share consolidation, and enforcement of payment of calls, and was to cease to be governed (at least in the main) by the provisions of the Joint Stock Companies legislation. The deed of settlement was capable of being altered by EGMs of the company's proprietors.

  7. [469] The 1855 Act, s 4.

  8. [470] The 1855 Act, s 6. The power vested in the railway company extended to "the making of surveys and other preliminary arrangements for any railway or railways in India" even though no contract then existed for the making of such railways: ibid. At the end of the list of "facilities, rights, and advantages" afforded to the East India Company was a specific power given to both parties to enter into agreement for "the eventual or contingent transfer of the [undertakings of the railway company] or any part thereof to the East India Company". The power to enter into contracts included the power "to vary and alter such contracts, agreements, and arrangements" and to enter into new ones: ibid.

  9. [471] The 1855 Act, ss 7, 8. The debentures could be issued "in England or elsewhere, or in India" in amounts varying from £20 to £1,000 each, bearing interest to a maximum of 5% p.a.: ibid., s 8. The East India Company had agreed to guarantee interest at variable rates (up to 5% p.a.) on a proportion of the capital raised, in exchange for which the railway company would repay the interest as soon as net profits were available from the railway operation. Section 19 of the 1855 Act required the net profits to be divided in a manner which gave priority to the repayments, and then provided for the residue to be distributed proportionately amongst the various "shareholders entitled to dividend".

  10. [472] The 1855 Act, ss 9, 10. All the powers in the original deed of settlement relating to transactions in Great Britain were, subject to consistency, to apply equally to such transactions in India: ibid., s 9. The Indian office or offices were to be provided with an official seal to be used "in lieu of the common seal of the company": ibid., s 10. Appointed staff were to be subject to such regulations relating to their conduct as the board thought fit. Subsequently an office was established at Lahore: see the preamble to the 1886 Act (discussed below).

  11. [473] The 1855 Act, s 11. The registers were to cover shareholders, consolidated stock (if applicable), transfers, mortgages and bonds, and debentures. No stock or security was to be registered at more than one office at any time, and transfers were to be made on the written notice of the security-holder to the relevant office: ibid., ss 12, 13. For the purpose of ascertaining the laws affecting any particular shares, the location of the relevant register was deemed to determine the jurisdiction (Great Britain or India): ibid., s 14.

  12. [474] The 1855 Act, ss 15-18. These miscellaneous matters included: relaxation of the formalities for annexing the company seal, extension of the terms of office for original directors (up to 5 years), and recovery of byelaw penalties in India. 475 20 & 21 Vict. c.clx (1857) ("the 1857 Act"), being "An Act for authorizing the Scinde Railway Company to extend their Operations, and for regulating the Capital of the Company; and for other Purposes". The short title of the 1857 Act was assigned for citation purposes by section 1, and various terms were defined in sections 2-4. In particular, "India" was defined as meaning and "includ[ing] the territories now and from time to time hereafter under the government of the East India Company": ibid., s 2, and "superior courts" included "Her Majesty's Supreme Courts of Judicature at the several presidencies in India respectively, and the courts of the East India Company": ibid., s 3.

  13. [476] TThe 1857 Act, s 5. Savings provisions were then specifically incorporated in the succeeding twelve sections (ss 6-17), prefaced in each case by the words "Notwithstanding the annulling of the Deed of Settlement and the repeal of the recited [1855] Act,".

  14. [477] The 1857 Act, preamble. The "necessary" amount appeared to be uncapped.

  15. [478] The 1857 Act, preamble.

  16. [479] The expenses incurred in promoting the 1857 Act were to be borne by the railway company, and were to be funded in equal portions from the accounts of the three projects (the Scinde railway, the Punjaub railway and the Indus steam flotilla): the 1857 Act, s 71.

  17. [480] The 1857 Act, s 6.

  18. [481] The 1857 Act, s 7. The railway company was also to have a company seal "for use in India in lieu of the common seal of the company", and to make regulations for its affixing: ibid., s 18.

  19. [482]The 1857 Act, ss 8, 9. The previous authorisation was derived from the deed of settlement (March 1855) and the 1855 Act (July 1855); the principal contract, made prior to the passing of the 1857 Act, was that with the East India Company (December 1855).

  20. [483] The 1857 Act, s 10.

  21. [484] The 1857 Act, ss 11.

  22. [485] The 1857 Act, s 12, 13.

  23. [486] The 1857 Act, s 14.

  24. [487] The 1857 Act, ss 15-17. These savings included the making of all railway company books self-producing as evidence in court; the continuing in employment (and of the terms of employment) of all company office-holders; and the saving - by way of transitional provision - of all acts, rights and liabilities relating to company officers and staff, and to all shareholders, who were based in India, "until the due publication of this [1857] Act in India".

  25. [488] The 1857 Act, ss 19-21. Section 19 of the 1857 Act laid down 19 different contract-related matters. In addition to the power to wind itself up, the railway company was empowered to effect a merger of the whole or part of its operation with any other railway undertaking: ibid., s 19(18). The railway company and the East India Company were authorised to effect additional contracts as the need arose, varying previous contractual arrangements (and provision was made generally for dispute resolution by arbitration in accordance with the Companies Clauses Consolidation Act 1845): ibid., ss 20, 21.

  26. [489] The 1857 Act, ss 23-31. The railway company's capital allocation in 1857 stood at £500,000, "raised for the purposes of the Scinde Railway": ibid., s 23. The first tranche of additional share capital raised was to be applied towards the Punjaub railway and the Indus Steam Flotilla operations: ibid., s 26. The shares (and the share capital) were to be categorised by the project for which money was being raised: Scinde railway, Punjaub railway, the Indus flotilla, and such other project "as the East India Company from time to time [may] sanction": ibid., s 27. New shares were to be offered to, and apportioned amongst, the existing shareholders (who held shares "at a premium"), who were to be given a finite time within which to accept the issue (failing which, the shares were then to be offered elsewhere): ibid., ss 28-31.

  27. [490] The 1857 Act, ss 32, 33. Notices of call made on shares would be sufficient if made in England or in India, dependant upon their place of registration: ibid., s 34. Net revenue of the company "applicable to dividends" was to be distributed rateably across those shareholders who were entitled to it: ibid., s 36.

  28. [491]The 1857 Act, s 35. The accounts were to be submitted, as often as required, "to the supervision of" the East India Company. The railway company's management expenses were to be fairly appropriated across the various accounts.

  29. [492] The 1857 Act, ss 37, 38 and 41. The ceiling was one-third of the capital subscribed at the relevant time. The railway company was specifically disempowered from borrowing on mortgage. Bonds issued in England or in India were to carry the company seal, were to indicate the undertaking to which they related, and were to give the bondholders rights of claim only against the assets of the particular undertaking. By section 40, share capital and bond borrowings were to be applied only for the specific purposes for which they were raised.

  30. [493] The 1857 Act, ss 42-57. Ordinary general meetings of shareholders were to be held twiceyearly, with a quorum of 15 shareholders; extraordinary general meetings could be held on a special requisition. Shareholders were to have one vote per 100 shares held, but were restricted to voting on questions relating to the specific "undertaking" (ie. the project) for which they held shares: ibid., ss 47, 48. Directors were not to exceed 12 in all (with a quorum of three), and were each to have a minimum holding of 500 shares. The original directors were entitled to continue in office until retirement. The railway company was authorised to appoint committees and individuals to act on its behalf (with delegated powers and indemnification) "in India, or elsewhere" in connection with its various operations, subject to the company's regulation: ibid., ss 54-57.

  31. [494] The 1857 Act, ss 59-65. The office or offices were to maintain separate and location-identified registers of shareholders, transfers, consolidated stock holders, and of bonds (and no share or bond was to be registered at more than one office). Shares and bonds could be transferred on notice between England and India. Duplicate books (not themselves registers) could be kept of the entries on the Indian registers. The location of shares and bonds for jurisdictional purposes was to be determined by the location of the relevant register.

  32. [495] The 1857 Act, ss 66-70. These matters included the giving of public notice by advertisement in "a London daily morning paper" and the London Gazette, and in a newspaper "published and commonly circulated in the presidency of Bombay": ibid., s 66, 67; the need for railway company byelaws to be consistent with "the laws of that part of India where they are to have effect" and to be approved by such authority as the East India Company should determine: ibid., s 68; and certain administration of justice arrangements.

  33. [496] The Secretary of State had only recently taken over the governmental functions of the East India Company pursuant to the provisions of the Government of India Act 1858 (21 & 22 Vict. c.106).

  34. [497] See preamble to the Scinde Railway Company's Amalgamation Act 1869 (32 & 33 Vict. c.lxxx) ("the 1869 Act"), being "An Act for authorizing the Scinde Railway Company to amalgamate their several undertakings, and to make further agreements with the Secretary of State in Council of India; and for other purposes". The short title to the 1869 Act was assigned by section 1. The various terms and conditions related, amongst other things, to the guarantee by the Secretary of State of interest payable on capital lodged with him; application of the net receipts of the railway company; and the ultimate "surrender by the company of and ... the purchase by the Secretary of State in Council of the Indus Steam Flotilla" (the purchase price for which would be "determined according to the mean market value in London of Indus Steam Flotilla shares" over the three year period immediately prior to acquisition): ibid., preamble. The acquisition was to occur in 1884 (25 years on) or in 1909 (50 years on). Under the 1859 contract, the Secretary of State was to grant the railway company a lease for the relevant landholding for up to 99 years, until 1958 (although with provision to determine sooner): see preamble to the 1886 Act (discussed below).

  35. [498] This Punjaub railway would run from, or near from, Mooltan to, or near to, Lahore and Umritsir, and the requisite land would be leased to the railway company by the Secretary of State for 99 years (unless previously determined) until 1958: see preamble to the 1886 Act (discussed below).

  36. [499] See the 1857 Act, s 19(15) (discussed above) on the "surrendering or selling at any future period" of the two railways in whole or in part. 500 The 1869 Act, preamble. The surrender and sale were to occur in the same years (1884 or 1909) as the steam flotilla transfer. Valuation of the undertaking was to proceed on an identical basis.

  37. [501] The 1869 Act, preamble. The 25 and 50 years respectively, for exercise of the purchase option, ran now from 1863. The obligation to grant a lease of the requisite land on completion of the works ran for 99 years until 1962: see preamble to the 1886 Act (discussed below).

  38. [502] The 1869 Act, preamble. The capital moneys had been paid across, first, to the East India Company and, later, to the Secretary of State in Council of India. Some of the debentureholdings were convertible into shareholdings. Various leases had been granted to the railway company in respect of "the railways, works, and premises": ibid.

  39. [503] The 1869 Act, preamble. The railway company needed new powers to enter into additional agreements with the Secretary of State and to change the name of the company. These powers, and the 1869 Act generally, were not to derogate from any powers previously conferred on the railway company by the 1857 Act (see above), nor to affect any provisions contained in the various "indentures of contract": the 1869 Act, s 30.

  40. [504] The costs incurred in promoting and obtaining the 1869 Act were to be borne by the railway company and, subject to direction by the Secretary of State, apportioned between the four operational accounts (for the Scinde, the Punjaub and the Delhi railways, and the Indus steam flotilla): the 1869 Act, s 32.

  41. [505] The 1869 Act, s 5. Amalgamation could only take place when the shareholders for each existing undertaking had agreed the scheme of amalgamation at special general meetings: ibid., ss 6, 7. Each new "united undertaking" (and its share issue) was to bear the name approved by the railway company directors: ibid., s 13, and the company shareholders were permitted in special general meeting to change the name of the company (as if under the Companies Clauses Act 1863): ibid., s 27. Henceforward "any new railways or other works in India" for which the railway company was contractually responsible were (if so agreed) to fall within the aegis either of one of the new undertakings or of an existing undertaking: ibid., s 14; and all revenue which would have been received by the company for its former separate undertakings was to be credited to the relevant united undertaking: ibid., s 15.

  42. [506] The 1869 Act, ss 8-10 and 16. On amalgamation, all existing shares in the various undertakings were to become shares in the relevant united undertaking (and all shareholding rights and liabilities were to be preserved, including any trusts under which they may have been held); and shareholders were to be entitled, on application, to receive fresh share certificates. For the purpose of qualification as director or auditor, the new shares in a united undertaking were deemed to be in the same class (and to comply with the provisions of the 1857 Act: for which, see above). However, directors were required to hold not less than £1,000 worth of shares "in the aggregate of all the classes" (and auditors not less than £500 worth): ibid., s 10. The minimum number of auditors to be appointed was to be two: ibid., s 29.

  43. [507] The 1869 Act, ss 11, 12. From amalgamation, all capital held for the separate undertakings was to be applied for the purposes of the relevant part of any united undertaking. The railway company was empowered to raise "additional capital" for each united undertaking by a new share issue, subject to that capital being "necessary" and to sanction from the Secretary of State (which might be granted on terms): ibid., s 12. The new shares were to carry dividend rights, "but without prejudice to the rights of existing shareholders": ibid., s 18.

  44. [508]The 1869 Act, s 17. Consolidated stock could be issued in lieu of shares which were issuable under the 1857 or the 1869 Acts. First refusal to take up the issue of shares or stock for a united undertaking was to be offered to existing shareholders: ibid., s 19.

  45. [509] The 1869 Act, s 20. The ceiling was set at 1/3rd of the capital for each undertaking (of which 50% should have been paid up), and liability was to be ring-fenced to the particular united undertaking.

  46. [510] The 1869 Act, s 21. The eight delineated purposes were additional to those already authorised under the 1855 and 1857 Acts (for which, see above. By 1869 the 1855 Act had been repealed, but actions taken under it were saved). The purposes included: substituting new contracts for old; constructing new railways, works or flotillas; obtaining interest guarantees on share capital; and the "surrendering or selling at any future period to the Secretary of State", or to any other persons, of the railway operation (or part of it), followed by winding-up of the company and distributing of the net assets: ibid. The Secretary of State's power of purchase in the 1869 Act was to supersede similar powers relating to the separate undertakings contained in earlier contracts: ibid., s 23.

  47. [511] The 1869 Act, s 26. This power was to be exercised in accordance with, and construed with, an 1868 Act (31 & 32 Vict. c.26, now repealed) which related to Indian railway companies raising money by debenture stock. Debentures issued prior to amalgamation were to be converted into shares of the new united undertakings: ibid., s 25.

  48. [512] The 1869 Act, ss 22, 24, 28 and 31. Existing arrangements for the guarantee of interest on share capital, and for repayments, were specifically protected (supported by separate accounting arrangements) by section 24. Other matters included the temporary closing of transfer registers (ibid., s 28), and interest and dividend payment restrictions (s 31).

  49. [513] Preamble to the Scinde, Punjaub and Delhi Railway Purchase Act 1886 (49 & 50 Vict. c.xlii) ("the 1886 Act"), being "An Act to provide for the vesting of the undertaking of the Scinde, Punjaub and Delhi Railway Company in the Secretary of State in Council of India; and for other purposes". The short title to the Act was assigned by section 1. The amalgamation scheme (and, more particularly, consequential modifications to the existing contractual arrangements) required the sanction of the Secretary of State before becoming effective. Approval was given by contract made between the parties in June 1870 (which contract recited the various capital amounts raised by share issue and by loan for each of the undertakings). That contract also rationalised the various leasehold arrangements (for the three railways and the steam flotilla), so that the single 99 year lease would run from January 1860 (thus expiring in 1959, unless previously determined).

  50. [514] The 1886 Act, preamble. The relevant clauses in the contracts from 1855 to 1863 were superseded by the new contract provisions. On purchase, all leased lands would "revert to and become the property of Her Majesty, for the purposes of the Government of India": ibid. The railway company would also be required to sell "any lands in Great Britain" held by it for operational purposes, and to pass the net proceeds to the Secretary of State.

  51. [515] The 1886 Act, preamble. The 1870 contract (as recited in the preamble) set out a formula for calculation of the applicable rate of interest.

  52. [516] The 1886 Act, preamble.

  53. [517] This property consisted of monetary items, particularised in Schedule 1 to the 1886 Act.

  54. [518] See above. The costs incurred in obtaining the 1886 Act were to be paid out of any surplus profits made by the railway company during 1885 and, failing that, by the Secretary of State "out of the revenues of India": the 1886 Act, s 55.

  55. [519] The 1886 Act, s 3. The transfer of property specifically excluded the property detailed in Schedule 1 to the 1886 Act. The railway company's revenue accounts were to be "finally settled" in accordance with the 1870 contract (see above) "as soon as may be" and, once closed, all contracts made between the railway company and the Secretary of State (or his predecessor the East India Company) were deemed to "be at an end", and the Secretary of State was obliged "to indemnify the company against all such debts and liabilities" as may have been incurred previously with sanction: ibid., ss 4, 5.

  56. [520] The 1886 Act, s 6. The annuity (payable half-yearly) was in substitution for a lump sum payment of just over £14 million.

  57. [521] The 1886 Act, s 7.

  58. [522] The 1886 Act, ss 8-11. The final payment was due on 1 January 1959, at the completion of the residue of the original 99 year term, and all instalments were to be paid to "the Bank [of England] in London" for the sole purpose of distribution (and expressly were not liable to attachment for any pre-existing debt). All registers of shares and stock in both London and Lahore were to be closed during June 1886, and the Bank was then to prepare registers of annuitants, ascertain the amount of annuity due to each transferring shareholder, and finally re-register those shareholders as annuitants.

  59. [523] The 1886 Act, ss 12-15. In default of opting, annuitants would be placed in Class B. Separate registers of annuitants were then to be established: "the Scinde, Punjaub and Delhi Railway Register of Annuitants class A" and likewise for class B, and certificates of respective holdings were to be issued (at which point the original shares or stock were cancelled). Subsequent transfers were permitted, but not between classes. The sinking fund (in the form of its investments) was to be held in trust for the qualified annuitants by the Bank of England: ibid., s 22.

  60. [524] The 1886 Act, ss 16-35. These sections covered such matters as: the holding of annuities as part of trust funds or settlements; the half-yearly payment of annuities (subject to the authorised deductions); the making, and investing in various public institutions, of annuity deductions for the sinking fund (and the regular publication of statements of investment); the eventual division of "the moneys representing the accumulations of the sinking fund" to the then existing (in 1959) class B annuitants, and the holding by the Secretary of State of any undistributed moneys pending legitimate claims; the management of the annuities (including deduction of management expenses calculated by reference to a statutory formula); and various ancillary matters relating to payments and to transfers. The Secretary of State was to hold any moneys in the railway company's hands which represented unclaimed interest, dividends, or surplus profits on shares, stock and debentures; to indemnify the company against any claims arising thereon; and not to pay annuities in respect of such unclaimed shares or stock (but subject to continuation of the payments relating to the sinking fund and the pensions): ibid., ss 38, 39. Where the Secretary of State's obligation to pay unclaimed annuities was suspended, he was still bound to indemnify the Bank and to hold such moneys pending valid claims (which, on being made out, revived his obligation to pay the annuity portion): ibid., ss 40-42. Any disputes relating to claims were to be resolved by application to the High Court: ibid., ss 42, 44.

  61. [525] The 1886 Act, ss 36, 37 and Sch 2 (which listed eight named employees). The payment of pensions was to be funded by deduction from the Secretary of State's half-yearly annuity portions prior to distribution to the class annuitants.

  62. [526] The 1886 Act, s 54. In the context of this note, this is a key section. Once the railway company's surplus profits and scheduled property had been distributed (in accordance with section 53 of the 1886 Act: see below), the directors were required to certify that fact to the Board of Trade, today the Department of Trade and Industry. The company was then deemed to be dissolved as at the date of certification (although prior to that date, even though the company had been acquired by the Secretary of State, the directors remained fully empowered to conduct the company's affairs and to effect the winding-up).

  63. [527]The 1886 Act, ss 43, 45-53. The various matters included: authorising of the Secretary of State to exchange annuities for India stock; the Secretary of State's obligation to continue making contributions to the sinking fund and to the pension fund, notwithstanding redemption of annuities held by him; the obligation on the Bank to make further annuity deductions so as to create a "suspense account" to fund the outcome of legal proceedings on-going between (a) the partly-paid shareholders and (b) the railway company and its stockholders; the transfer from the railway company to the Secretary of State of the "special trust for a clergy endowment fund" (ibid., s 51 and Sch 1 Pt 2); the transfer from the Secretary of State to the company of the widows, orphan and benevolent fund for immediate distribution; and the realisation, and distribution to entitled shareholders, of the company's surplus profits and its remaining assets (ibid., s 53 and Sch 1).

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